Mergers, Acquisitions and Restructuring

Traditionally as organisations have sought to remain relevant in these intensely uncertain, highly competitive and irreversibly disruptive environments, they have pursued M&A and restructuring as vehicles for organisational repositioning.

While the brick-and-mortar (old economy) industries see M&A as means of individual survival and growth in slow growth, but highly competitive environment, M&A has been pursued with equal vigour in the vibrant technology industries as means to access latest and emerging technologies and acquire key elements of value chain.

And M&A has been recognised sine qua non when companies pursue global scale and scope. And often companies pursue M&A as defensive, survival strategy.

The multibillion-dollar Vodafone India-Idea merger consummated during 2017/18 was a strategic response to the tectonic changes seen in the Indian telecom landscape, though the outcome—even after five years—remains a big “?”.

Even as we write this, we note the Adani Group has won the bid to acquire the cement giants ACC and Ambuja Cements from the exiting Swiss group, Holcim.

This USD 10.5 billion mega acquisition catapults the Adanis to be the 2nd largest cement producer in India – and from nowhere in the industry- with a massive 75 million tonne capacity.

The global scale and sweep of M&A are humongous – annual global M&A announcements indicating strategic intent are worth several trillion dollars, higher than the GDPs of all but a handful of countries.

Ironically, the year 2021, one of the most disruptive years due to Covid pandemic, hit all-time record in M&A with global M&A announcements of over USD 5.8 trillion.

Back home in India M&A is no longer the preserve of established firms: start-ups such as Byjus, Delhivery, PharmEasy have been aggressively scaling up and diversifying through series of M&As even without/before public ownership and stock exchange listing.

While seeking growth through M&A, companies across the world also pursue the opposite—strategic contraction involving break-ups through divestiture and de-merger (spin-off) as they constantly endeavour to realign and rebalance their business portfolios and refocus their energies and resources.

Despite its immense popularity, M&A carry huge execution risks - attested by the fact that the success rate in M&A is just about 20%-30%. Yet there are organizations that have developed a habit of acquiring successfully and creating value consistently. Indian companies like peers elsewhere have demonstrated mixed results.

While a company such as Sun Pharma had grown to become a USD 30b-value company primarily through decades-long effective M&A strategies, the troubled Ranbaxy merger of 2015 – its largest transactions to-date – only underscores the risks, even for the experienced.

Dozens of Indian companies of different sizes—across industries and management stables—have also come to grief from ill-advised, debt financed cross-border deals forcing further restructuring.

Yet avoiding M&A as a strategic choice may not be an option for long; rather learning to effectively and efficiently manage the same becomes the key differentiator for success.

Given the sheer sweep of the restructuring phenomenon, most of us also tend to be impacted by these forces, be it as investors or investment bankers, or as employees of the companies involved, or as consumers and members of the society at large.

Hence it is important to understand the key macro-economic and firm-level forces driving the restructuring initiatives at individual companies that could eventually lead to massive structural transformation of industries and even economies at large.

Beneath the veneer of hype and hoopla and the facade of shareholder value, various dimensions—strategic brilliance, financial wizardry, legal acrobatics, organisational dilemmas, plain clash of giant CEO egos and old-style politics—all play themselves out.

In keeping with MA&R’s significance in any organisation’s leadership agenda, IIMA has been successfully offering its programme on Mergers, Acquisitions and Restructuring for well over two decades. IIMA's forthcoming programme, Mergers, Acquisitions, and Restructuring, like the past editions, seeks to provide an in-depth appreciation of this multi-faceted phenomenon.

In this Programme, the participants will be exposed to the perspectives and skillsets required for effective management of the MA&R process. Through a series of real-life and exciting case studies, the participants will get a “handle” on the entire MA&R value chain from planning through deal execution to the post-transaction phases.

The programme will thus deal with the key issues, viz., the strategic rationale and business case, key value drivers, target identification and evaluation in terms of strategic, financial and cultural fits, regulatory and deal structuring issues.

The learning experience will be intense with the pedagogy consisting of case analysis, faculty-led and peer-to-peer discussions and group work. The participants will explore a wide range of acquisition and restructuring situations to develop an understanding of value creation through mergers, acquisitions, and restructuring.

Program Highlights

The programme will discuss the entire gamut of MA&R themes and sub-themes and topics as follows: 

• “What”? The different types of corporate restructuring transactions viz., business combination transactions such as mergers and acquisitions and break-up transactions such as demergers or spin-offs and divestitures. Takeaways also include the various players in the M&A field and their roles.

• “Why”? The motives for and drivers of M&A and restructuring activities such as value creation, preservation and sustenance through various strategic initiatives. These include product and/ or market expansion and/ or diversification, capturing of cost synergies etc.

• “When”? At what stage in an industry's or organization’s life cycle would the pursuit of these specific strategies be appropriate?

• “How”? The key elements in the M&A value chain viz., pre-acquisition planning, deal execution including valuation and financing, post-acquisition integration and management and regulatory aspects and deal structuring.

• “How-2?” Regulatory aspects and deal structuring. This module explores creativity in deal structuring and examines key relevant aspects of takeover and company law regulations, tax issues and insolvency and bankruptcy aspects.

• “How Not”? What can go wrong in M&A and how to avoid/ mitigate the common pitfalls.

Pedagogy

The learning experience will be intense with the pedagogy consisting of case analysis, faculty-led and peer-to-peer discussions and group work. The participants will explore a wide range of acquisition and restructuring situations to develop an understanding of value creation through mergers, acquisitions, and restructuring.

For Whom

This programme is designed for top management personnel responsible for charting company growth strategies and senior executives with an identified role in strategy formulation and implementation, business development and finance. The target participants may have business unit, corporate or group level responsibilities.