MERGERS, ACQUISITIONS

&
CORPORATE RESTRUCTURING

PRESENTED TO :

PRESENTED BY:

MS. BALWINDER KAUR

NEHA VERMA

(FACULTY DIAS)

(07812303913)

PRESENTATION ON:
MERGER OF
MAHINDRA & MAHINDRA
AND
SANGYONG MOTORS

INTRODUCTION: MAHINDRA GROUP

MAHINDRA GROUP commence its journey in 1945 with its first launch of WILLYS JEEP in

India and today it stands out as a US $790 million Indian multinational.

The Mahindra Group operates in nine segments viz. Automotive Segment, Farm Equipment

Segment, Information Technology Services, Financial Services, Steel Trading and

Processing, Infrastructure, Hospitality, Systech, Others Consisting Logistics, After-Market,
Two Wheelers and Investments.
Mahindra group is the only Indian company selling the top tractor brand in the world. It is a

full player in almost every segment of the automobile industry, from two wheelers to UVs,
SUVs, and CVs

INTRODUCTION: SSANGYONG MOTORS

SSANGYONG MOTORS was originally founded in 1954 as two separate companies; HA

DONG-HWAN MOTOR WORKSHOP and DONGBANG MOTOR CO. merging into HA DONGHWAN MOTOR COMPANY. In 1986 it was taken over by SSANGYONG BUSINESS GROUP and
changed its name to SSANGYONG MOTORS.

It started off as a premier manufacturer of SUVs and Recreational Vehicles (RVs) in Korea.
In 1988, it developed a compact 4WD SUV KORNADO family, which was the first SUV
manufactured in Korea.

Its latest SUV, a monocoque compact SUV named KORNADO C was launched in export

markets in October 2010.

SsangYong has a strong domestic network of over 130 dealers and exports to over 90

countries with the help of more than 1200 dealers.

THE MERGER
On November 23, 2010, SsangYong Motor Company Limited (SYMC) and Indias Mahindra & Mahindra

Ltd. (M&M) announced the signing of a definitive agreement in Seoul.

Together with its financial capability, Mahindra offers competence in sourcing and marketing strategy

while SsangYong has strong capabilities in technology. They are committed to leverage the combined
synergies by investing in a new SsangYong product portfolio to gain momentum in global markets
There is also an opportunity to introduce a premium portfolio of SUVs in the Indian market, providing a

new growth avenue for SsangYong and further strengthen M&M's dominant position in the UV segment.
Mahindra has committed to nurturing the SsangYong brand in global markets while preserving its Korean

heritage. It is intended that SYMC will continue to function as an independent entity with primarily a
Korean management. The acquisition will offer financial stability to SYMC and the two companies will
work to further strengthen SsangYongs product portfolio across the globe. The inherent strengths of
SsangYong combined with Mahindras expertise will help in building a global SUV major.

NATURE & HIGHLIGHTS OF MERGER

Horizontal Merger resulting in a Complementary Portfolio: A horizontal merger

occurs between companies in the same industry. Horizontal merger is a business

consolidation that occurs between firms who operate in the same space, often as
competitors offering the same good or service. Horizontal mergers are common in
industries with fewer firms, as competition tends tobe higher and thesynergies and
potential gains in market share are much greater for merging firms insuch an industry
DEAL IN MONITEARY TERMS:
Total cost of acquisition of US$ 463 million with US$ 378 million in new stocks and US$ 85

million in corporate bonds

Mahindra acquired 70% stake
Deal was concluded by March 2011

PROCEDURE OF THE DEAL

AUG 7, 2010
Mahindra board
approves
SsangYong Motor
bid

AUG 12,
2010
Mahindra
named
preferred
bidder

NOV 23, 2010

Deal formally
signed

AUG 23,
2010
Mahindra
signs MoU

JAN 28, 2011

Formal consent
from secured &
unsecured
creditors

FEB 1,
2011
Court
approv
al

FEB
9,2011
Formal
allotment
of shares

MAJOR REASONS OF MERGER

Synergies in operations, coupled with technical strength
Access to high potential market
Focussed management and financial stability in SYMCs operations

OF M&M

PRE & POST MERGER ANALYSIS :

RATIO ANALYSIS OF M&M
Ratios

2012

2011

2010

2009

Current Ratio

0.95

0.86

1.11

0.90

Quick Ratio

0.66

0.61

0.86

0.83

Debt- Equity Ratio

0.26

0.23

0.37

0.77

LT Debt Equity Ratio

0.26

0.32

0.46

0.83

Inventory Turnover Ratio

14.99

15.64

17.91

14.56

Debtors Turnover Ratio

19.05

17.97

16.09

12.77

Investment Turnover Ratio

14.99

15.64

17.91

14.56

Fixed Assets Turnover Ratio

4.32

4.08

3.85

2.84

Total Assets Turnover Ratio

2.19

1.86

1.74

1.42

Asset Turnover Ratio

2.27

2.00

1.85

1.61

Financial Ratios:

Efficiency Ratios:

TREND ANALYSIS OF M&M

RATIO ANALYSIS OF SYMC

Ratios
Valuation Ratios:
P/E Ratios(TTM)
P/E High- Last 5 Years
P/E Low- Last 5 Years.
Financial Ratios:
Quick Ratio
Current Ratio
LT Debt To Equity
Total Debt To Equity
Interest Coverage
Effectiveness Ratios:
Return On Asset
Return On Asset- 5 Year Avg.
Return On Investment
Return On Investment- 5 Year
Avg.
Return On Equity
Return On Equity- 5 Year Avg.

2012

2011

2010

13.80
22.98
6.99

15.32
32.70
9.11

0.74
1.06
11.52
19.80
-

1.12
1.34
45.76
85.98
0.85

1.41
1.74
34.96
65.20
12.70

-14.95
-24.40

8.99
10.44
15.12
17.78

9.87
9.49
15.27
15.42

-44.28

20.58
22.46

18.68
18.50

THANK YOU!