Deal between AIRTEL and MTN

Bharti Airtel formerly known as Bharti Tele-Ventures LTD (BTVL) is the largest cellular service provider in India,

with more than 110 million subscribers as of 2009 Founded July 07, 1995 founder(s)Sunil Bharti Mittal Headquarters New Delhi, India Key people Sunil Mittal (Chairman) & (MD) Sanjay Kapoor(CEO)

BHARTI AIRTEL

“MY TELEPHONE NETWORK” MTN Group is a South Africa-based multinational

mobile telecommunications company, operating in many African and Middle Eastern countries.

MTN Group's President and CEO is Phuthuma Nhleko. MTN describes itself as "the leader in

telecommunications in Africa and the Middle East" and as of early 2007 is active in 21 countries.

MTN Group provides cellular phone service to more than 80 million subscribers

MTN

In May 2008, it emerged that Bharti Airtel, an INDIA-based telecommunications company, was exploring the possibility of buying MTN Group.

The Financial Times reported that Bharti was considering offering US$19 billion for a 51% stake in MTN, which would be the largest overseas acquisition ever by an Indian firm.

DEAL

However, talks fell through after a few days and Bharti Airtel pulled out of the proposed deal on May 24.

Reliance Communications is in talks with MTN for a "potential combination of their businesses." If realized, the estimated worth of the combined entity would have been $70 billion (£35 billion), with 116 million subscribers worldwide.

on July 18, the two companies announced that they had mutually decided to end discussions regarding the merger.

In May 2009, Bharti Airtel again confirmed that it is in Talks with MTN and companies have now agreed discuss the potential transaction exclusively by July 31, 2009.

Bharti Airtel said in a statement “Bharti Airtel Ltd is pleased to announce that it has renewed its effort for a significant partnership with MTN Group.

The sticking point of the deal has been the South African government's insistence that MTN have a dual listing. Indian law does not currently allow for this.

Existing FEMA provisions do not allow Indian companies to directly list their shares on an overseas stock exchange.

MTN and its shareholders would acquire a 36% economic interest in Bharti, while it's looking at 49% in MTN.

South African's worry that control of MTN, which is perceived as a national champion, could pass in to foreign hands

REASON TO COLLAPSE

Aqisition of zen by bharti

On March 30, 2010, Bharti had entered the deal to acquire Zain Telecom's operations in 15 nations, excluding Sudan and Morocco

On June 8,2010  Bharti Airtel completed the deal for an Enterprise Value $10.7 billion (about Rs 48,000 crore)

This acquisition, besides giving Bharti its much-desired presence in Africa, made it the world's fifth largest wireless company with operations across 18 countries and a subscriber base of around 179 million

The African business widened Bharti's reach, which was hitherto restricted to Asia and the Indian Ocean region with businesses in Sri Lanka, Bangladesh and Seychelles

Bhartis’entry into Africa gave the company access to a population of about 470 million people from the Atlantic coast to the Indian Ocean, with just over a third of them carrying mobile phones

The Zain acquisition was contemplated to take the revenue of the combined entity to an estimated $13 billion

The combined business was estimated to have 180 million customers and generate EBIDTA of $4.7 billion on revenue of $12.4 billion, according to Bharti

Of the $10.7 billion enterprise value of Zain, Bharti paid $8.3 billion upfront and $700 million after a year.

It also take over approximately $1.7 billion of Zain's debts as on December 31, 2009

Of the $8.3 billion paid to Zain, Bharti raised debt from a consortium of foreign banks and State Bank of India with the lead-arranger and lead-advisor Standard Chartered Bank committing the highest amount — $1.3 billion, followed by Barclays at $900 million.

The rest of the co-advisors — ANZ, BNP, Bank of America-Merrill Lynch, Credit Agricole CIB, DBS, HSBC, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation — allocated $600 million each.

State Bank of India agreed to an up to $ 1 billion loan in rupee terms

FINANCIALS

The deal made sense for Bharti for the following reasons:

Low Financial leverage Bharti had a very low “Net Debt to Equity Ratio” of

0.05 at the end of Dec., 2009 which means that it was virtually a debt free company.

Analysis

It is good to have low debt but zero debt is not a desirable situation as debt can increase the shareholders’ return on their investment due to tax advantages associated with borrowing.

Bharti is a profitable company with over 40% EBIDTA margins which is higher than the cost of debt. This means that it is better for the company to pay interest than paying dividends to a large number of shareholders and hence it should either reduce the shareholding (through share buyback) or increase debt and deploy debt in a profitable way. Bharti selected the second option and took debt to buy Zain that would return higher profits in the long term.

MERGER OF KINGFISHER AND AIR DECCAN

Kingfisher Airlines is a private airline based in Bangalore, India. Currently, it holds the status of India's largest domestic airline, providing world-class facilities to its customers.

Owned by Vijay Mallya of United Beverages Group, Kingfisher Airlines started its operations on May 9, 2005

With a fleet of 4 brand new Airbus - A320, a flight from Mumbai to Delhi to start with. The airline currently operates on domestic as well as international routes, covering a number of major cities, both in and outside India.

KINGFISHER

Kingfisher Airlines proved to be a stiff competition for other domestic airlines of India, with its brand new aircraft, stylish red interiors, stylishly dressed cabin crew and ground staff.

The airline introduced in-flight entertainment (IFE) systems, for the first time to Indian consumers. The IFE systems were provided on every seat, even on the domestic flights.

However, it faced a worsening economic scenario in 2008.

A wholly owned subsidiary of Deccan Aviation, Air Deccan, is India’s first low cost carrier.

• Deccan was known popularly as the common man's airlines. Continuing this trend even now, Simpli fly Deccan sold air tickets for as low as 500/-• Deccan Aviation, promoted by Capt. G.R. Gopinath, Capt. K.J. Samuel and Capt. Vishnu Singh Rawal, was initially incorporated as a private limited company on June 15, 1995 in Karnataka with the main object of pursuing chartered aviation services.• It was converted into a public limited company in 2005.

Air Deccan

On 1st June 2007, the Board of Air Deccan approved the allotment of equity share of 26% to UB group & its nominees. The shares were allotted at Rs.155 per share approximately a 10% premium for the current market price (CMP).

The UB group made the money in two phases: Rs.150 Crore as initial investment & Rs396 Crore at the on or before the end of June.

DEAL

UB group had to make an open offer to acquire an additional 20% stake costing 418 Crores.

Total deal size = 968 Crores for 46% stake. The UB group became the single largest

share holder in the Deccan Aviation ltd. Kingfisher : Deccan Airlines shares swap

ration 7: 3 Cash Paid = Rs.550Crs + 418Crs =

Rs.968Crs

Present Value of 46% stake = 62316254.28* 67.25= 419 Crores

Cost for kingfisher = Cash Paid - Present Value

968 – 419 = Rs. 549 Crores Value Created/Destroyed (67.25/155) = –

43.38%

The fresh equity capital will allow the Deccan to pay the loans & to fund various infrastructure projects.Reduction of cost by sharing infrastructure.

The merger ensures that Kingfisher does not need to invest more in infrastructure or in spare planes, thereby reducing costs and increasing profitability.

Access to International routes for Kingfisher

The deal advantages

Kingfisher and Air Deccan will now be able to access ground infrastructure at 65 airports, of which more than 28 are common to both the set ups.

The new entity will have over 71The airlines will achieve perfect synergies in the while preserving the front-end and that will enable both Deccan and Kingfisher to be profitable.

Increasing market share(32-34%) aircrafts.

SUNPHARMA AND RANBEXY MERGER

5thlargest global specialty generic pharma company No. 1 pharma company in India, one of the fastest growing markets.

No. 1 Indian pharma company in US market Over US$ 2 billion in sales Pipeline of 184 ANDAs including high-value FTFs No. 1 in generic dermatology, No. 3 in branded Approaching US$ 1 billion sales in high-growth

emerging markets. Expanding presence in Western Europe.

Sun Pharma to acquire Ranbaxy: Ranbaxy shareholders to get 0.8 shares of Sun Pharm a stock for every share of Ranbaxy Deal size approximately US$ 4 billion; ~ 2.2x LTM sales US$ 250 million of revenue and operating synergies by

3rd year post close Daiichi Sankyo to become the second largest

shareholder in Sun Pharma. Strategic business relationship to continue with Sun Pharma

Voting Agreements Daiichi Sankyo to vote in favor of transaction (~63.5%

ownership) Sun Pharma promoters to vote in favor of transaction

(~63.7% ownership)

Strong pipeline of 184 ANDAs including high-value FTFs

Clear Dermatology leadership No. 1 in generic dermatology, No. 3 in branded Coverage across Actinic keratosis, Anti-fungals, Acne,

etc Nearly US$ 4.2 billion in pro forma sales for the

twelve months ended December 31, 2013 Approximately US$ 1.2 billion in proforma EBITDA for

the twelve months ended December 31, 2013 Anticipated to be cash EPS accretive within first 12

months of close

Sun Pharma + Ranbaxy: Profile of a New Global Leader

~US$ 250 million of revenue & operational synergies by 3rdyear.

Primarily derived from top-line growth, and procurement & supply chain efficiencies.

Combined entity: 31 brands in Top 300

India represents U.S. $6 billion of the $550 billion global pharmaceutical industry with its share increasing at 10 % a year.

Indian sector represents 8% of the global industry total by volume, putting it in 4th place worldwide, it accounts for 13% by value, and its drug exports have been growing 30 % annually.

The “organized” sector of India's pharmaceutical industry consists of 250 to 300 companies, which account for 70 % of products on the market, with the top 10 firms representing 30 percent.

RANBAXY`s ACQUISITION BY DAIICHI SANKYO

Largest in the India 8th in largest in the global general pharmaceuticals Serving in over

125 Countries. Ground operations in 49 countries &

Manufacturing in 11 countries. Strong R&D Base.

Ranbaxy

2nd largest in Japan. 22nd Largest in the world. Operations in 50 countries. Producer of high quality drugs.

Daiichi-Sankyo

15th Largest drug maker in the world. Market Capitalization – 30 Billion. Low cost production.

Ranbaxy + daiichi-sankyo

Daiichi-Sankyo acquired 34.8% stake in Ranbaxy on 11th June, 2008.

Picked up another 9.12% through preferential allotment.

It was an all cash transaction. Size of the deal: US$ 4.9 Billion. As per the deal, total value of Ranbaxy was US $ 8.5

Billion.

DEAL

DAIICHI: Strengthen the position of the company. Acquisition will provide low cost manufacturing. Market access to over 60 countries .

Ranbaxy Co Ltd: Company will become one of the top 5 in generic

business. Access to Daiichi’s advanced R & D facilities. Access to Japanese drug market. Infusion of an additional $ 1 billion into the company. Surplus cash of Rs.3,000 crores flows in. The market capitalization goes to $8billion & the net

worth goes up.

BENEFITS OF AQUISITIONnticipated Benefits Of the Acquisition

Daiichi-Sankyo acquire Ranbaxy

MERGER OF ICICI AND BOR

Private sector lender Bank of Rajasthan on 18 may 2010 agreed to merge with ICICI Bank, India's second largest private sector lender. Bank of Rajasthan has a market value of $296 million.

The acquisition of Bank of Rajasthan by ICICI bank is the first consolidation of country's crowded banking sector since 2008.ICICI Bank and Bank of Rajasthan (BoR) boards on Sunday cleared their merger through an all-share deal, valued at about 30.41 billion rupees.

ABOUT BOR AND BOR

ICICI offered to pay 188.42 rupees per share, in an all-share deal, for Bank of Rajasthan, a premium of 89 percent to the small lender's closing price on Tuesday, valuing the business at $668 million.

ICICI is offering the smaller bank's controlling shareholders 25 shares in ICICI for 118 shares of Bank of Rajasthan.

The deal, which will give ICICI a sizeable presence in the northwestern desert state of Rajasthan, values the small bank at about 2.9 times its book value, compared with an Indian banking sector average of 1.84.

Bank of Rajasthan has a network of 463 branches and a loan book of 77.81 billion rupees ($1.7 billion).

ICICI offered to BoR

In March, the Reserve Bank of India appointed consulting firms to conduct a special audit of the books and accounts of Bank of Rajasthan.

The government has called for consolidation in the banking sector in order to make lenders more competitive but there has been little activity.

RBI had imposed a penalty of Rs 25 lakh on Bank of Rajasthan for various violations.

Why Merger???

The nine-month ended December’09, the bank had net loss of Rs 9 crore with total income of Rs 1,086 crore.

For the year ended March’09, Bank of Rajasthan had net profit of Rs 117 crore with total income of Rs 1,507 crore.

Operating income fell 11% to Rs 373.78 crore in Q3 December 2009 over Q3 December 2008.

TOTALS OF BOR

ICICI Bank will gain marginally from the merger as Bank of Rajasthan has a reasonable penetration in its home state.

As of March’09, it had 463 branches across the country. The deal will also help ICICI tackle increasing competition by HDFC Bank.

the deal values BoR at about 2.9 times its book value, compared with an Indian banking sector average of 1.84.

Advantage for ICICI and BoR

ICICI bank added CASA deposits totaling over 210 billion rupees in the year ended March 2010, compared with 41.63 billion rupees of BoR.

ICICI recorded a business per branch of 3 billion rupees compared with 47 million rupees of BoR for fiscal 2009.

For the quarter ended Dec 09, BoR recorded 1.05 percent of advances as NPA’s, which is far better than 2.1 percent recorded by ICICI Bank.

Comparison OF ICICI and BoR

To protest the Bank of Rajasthan's management plan to merge with the ICICI Bank, more than 4200 employees of Bank of Rajasthan went on a two-day countrywide strike.

SEBI maintains that Tayals hold 55% in the bank and that would make them owners of nearly 1.87 crore ICICI Bank shares from new dilution by ICICI Bank, amounting to around 1.75% stake in the bank.

ICICI Bank found it economic as always to invest in this deal on a 100% stock swap basis.

Deal is very expensive. The proposed amalgamation would

substantially enhance branch network and presence in northern and western India for ICICI.

Bank of Rajasthan has a network of 463 branches and a loan book of 77.81 billion rupees ($1.7 billion).

As on March 2009, BoR had 463 branches and 111 ATMs, total assets of Rs 17,224 crore, deposits of Rs 15,187 crore and advances of Rs 7,781 crore.

Impact of the DealThe

PE ratio 22.97 EPS (Rs) 36.10Sales (Rs crore) 5,826.98Face Value (Rs) 10 Net profit margin (%) 9.74Last dividend (%) 120Return on average equity 7.58

ICICI After merger

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