Imp Doc for Interview

8/3/2019 Imp Doc for Interview

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One of the recent M&As by an Indian company was Dabur acquiring Balsara Home Products for Rs. 143 crore. With thisacquisition, 7 brands namely, Promise, Babool and Meswak toothpaste, Odomos insect repellant, Odopic dishwashing, Odonil airfreshener and Sani fresh toilet cleaner were added to Dabur's kitty.

Chinese computer maker Lenovo has acquired IBM's personal computer division for$1.75 billion to become the 3rd largest PC maker in the world after HP and Dell.Re: Info about investment banking and consulting

-ve aspects of consulting job

This was posted in Business Week forum, by somebody who worked in a majorconsulting firm.

( same person wrote about the positive points of consulting too, i will put it in my nextpost)

--------------------------------------------------------------------------------------------Travel: It sucks. Don't let anyone tell you otherwise. It seriously sucks. Traveling 50-

100k miles per year is hard on your life. Your weekends are too short because you haveto spend Sunday night packing and if you are not lucky enough to get back in town onThursday night, your Friday night will be shot. Saturday will be spent catching up doingthings people with normal jobs do during the week...running errands. Don't forget, youmay also have to put in a few hours of work on the weekend too.

Hours: If you go into consulting expecting to work 60 hours per week, you will bepleasantly surprised. However keep in mind that you will be traveling at least 8 hours perweek on top of working. The worst times are the beginning and the end of engagements.You will get the occassional 80 hour plus week.

Strategy: Everyone wants to be a strategist. Talk to five different people and you will getfive different descriptions of strategy consulting. McKinsey will spin strategic sourcingof paper clips as "a major cost restructuring of the highest importance to senior mostexecutives of XYZ company" The reality is very little consulting is "real strategy work"anymore. Companies simply don't need to hire MBAs from XYZ firm to come in andadvise them on the direction of their organization like they used to. Why? They have theirown strat planning departments staffed by the same MBAs Bigtime consulting hires andin most cases former employees of Bigtime consulting. Companies hire consultants tocome in and do very specific projects that they 1) do not have expertise in (a one time

merger integration or system implementation for instance 2) need third party validation ofsomething they already know/do not have the resources in house to spare or 3) simplyhave money to waste (spend your budget or get it cut next year). The bottomline is if youlike solving whatever problem a particular business throws at you whether it is sourcingpaper clips, implementing SAP, or the occasional real strat project, then you will likeconsulting. If you think you are going to be on a first name basis with Michael Dell andwhisper the next major move of Dell Computer in his ear over lunch, you are going to besorely disappointed.


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The majority of your time will be spent doing several things. Interviewing clients, drivingspreadsheets, doing research, and then compiling the information into 150 pagepowerpoint decks that no one is going to read while working in a cramped conferenceroom (if you are lucky). All your work and brilliant analyses will get synthesized into one

bullet point that some partner is going to take to present while you sit back at the office.Bigshot CEO won't know you from the security guard (or the legions of other consultantsfrom other firms his whipping boy middle manager/directors have hired to do projects athis company).

Upward Mobility: People seem to think that consulting opens a lot of doors for you. itreally doesn't. if you want to work at a f500, you should go straight after b-school. Theproblem with consulting is that you become a jack of all trades, but an expert of nothing.What happens is that the most of the jobs that you will want generally will require sometype of a line experience. In other words, it is hard to go from consulting to being a Brand

Manager because you have no real applicable experience. The only areas that are going tobe open are strat planning departments and there are TONS of burnt out consultantslooking for those jobs. Also, people seem to assume that you can go work for yourclients. In some cases, this may be true. However, in most cases it is not. The reality isthat 80% of your clients are going to hate your guts. Consultants are universally despisedat most companies. Every now and then you make work with a client who really getssome value out of your work and recognizes that you are a genius and decides to offeryou a nice job, but don't count on it. Take a look at the alumni job postings at any topschool and ask yourself if you would be legitimately qualified for those positions aftertwo years of consulting. Be honest.

Projects: Another problem with consulting is that you don't really have any control overyour projects. Two people can have very different experiences. You simply have to dowhat work is available. If your utilization is low, you will soon see the door. Consultingis all about billable hours. As a result, you can't wait around for your dream project. Sowhen Joe Partner ask you to work on the chicken plant reengineering project in LittleRock, you have to go...

Clients are the top-top senior most executives: The reality is that 95% of yourengagements will be sponsored by some mid-level director, not the CxO. Now your workand analysis may be presented to the CEO at some point, but you are pretty much keptout of that conversation. Your project sponsor will update his boss who will update hisboss who will then give a 2 minute blurb at the board meeting on your initiative.Basically, consulting projects are engaged by mid-level managers who have budgets tohelp them get projects done to satisfy their bosses. CEOs are way to busy running big-asscompanies to be intimately invovled in the details of sourcing paper clips.


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------------------------------------------------------------------------------------------Re: Info about investment banking and consulting

Here are some brainteasers which you may face in interviews for i-bank or consultingjob....(source vault.com)

-Amith

--------------------------------------------------------------------------------------------Creativity and mental flexibility and speed are of paramount importance to high-techfirms, and one surefire way to test these qualities are through these slightly offbeatquestions.

If you field one of these brainteasers, your interviewer may give you a time limit. Don'tbecome flustered. Simply try to think through the question from every angle you can.Most questions require either logic, that ever-popular "out of the box" thinking, or both.

1) If you look at a clock and the time is 3:15, what is the angle between the hour and theminute hands?

The answer to this is not zero! The hour hand, remember, moves as well. The hour handmoves a quarter of the way between three and four, so it moves a quarter of a twelfth (1/4

of 360 degrees. So the answer is seven and a half degrees, to be exact.

2) A company has ten machines that produce gold coins. One of the machines isproducing coins that are a gram light. How do you tell which machine is making the

defective coins with only one weighing?

Think this through - clearly, every machine will have to produce a sample coin or coins,and you must weigh all these coins together. How can you somehow indicate which coinscame from which machine? The best way to do it is to have every machine crank out itsnumber in coins, so that machine 1 will make one coin, machine 2 will make two coins,and so on. Take all the coins, weigh them together, and consider their weight against thetotal theoretical weight. If you're four grams short, for example, you'll know that machine4 is defective.

3) Four members of U2 (Bono, the Edge, Larry and Adam) need to get across a narrowbridge to play a concert. Since it's dark, a flashlight is required to cross, but the band hasonly one flashlight, and only two people can cross the bridge at a time. (This is not to say,of course, that if one of the members of the band has crossed the bridge, he can't comeback by himself with the flashlight). Adam takes only a minute to get across, Larry takestwo minutes, the Edge takes five minutes, and slowpoke Bono takes ten minutes. A paircan only go as fast as the slowest member. They have 17 minutes to get across. Howshould they do it?


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The key to attacking this question is to understand that Bono and the Edge are majorliabilities and must be grouped together. In other words, if you sent them acrossseparately, you'd already be using fifteen minutes.

What does this mean? That Bono and the Edge must go across together. But they can notbe the first pair (or one of them will have to transport the flashlight back). Instead, yousend Larry and Adam over first, taking two minutes. Adam comes back, taking anotherminute, for a total of three minutes. Bono and the Edge then go over, taking ten minutes,and bringing the total to 13. Larry comes back, taking another two minutes, for a total of15. Adam and Larry go back over, bringing the total time to 17 minutes.

4) How many gallons of white house paint are sold in the U.S. every year?

THE "START BIG" APPROACH: If you're not sure where to begin, start with the basic

assumption that there are 270 million people in the U.S. (or 25 million businesses,depending on the question). If there are 270 million people in the United States, perhapshalf of them live in houses (or 135 million people). The average family size is about threepeople, so there would be 45 million houses in the United States. Let's add another 10percent to that for second houses and houses used for other purposes besides residential.So there are about 50 million houses.

If houses are painted every 10 years, on average (notice how we deftly make that numbereasy to work with), then there are 5 million houses painted every year. Assuming that onegallon of paint covers 100 square feet of wall, and that the average house has 2,000square feet of wall to cover, then each house needs 20 gallons of paint. So 100 milliongallons of paint are sold per year (5 million houses x 20 gallons). (Note: If you want to befancy, you can ask your interviewer whether you should include inner walls as well!) If80 percent of all houses are white, then 80 million gallons of white house paint are soldeach year. (Don't forget that last step!)

You could also start small, and take a town of 27,000 (about 1/10,000 of the population).If you use the same assumption that half the town lives in houses in groups of three, thenthere are 4,500 houses, plus another 10 percent, then there are really 5,000 houses toworry about. Painted every 10 years, 500 houses are being painted in any given year. Ifeach house has 2,000 square feet of wall, and each gallon of paint covers 100 square feet,then each house needs 20 gallons - and so 10,000 gallons of house paint are sold eachyear in your typical town. Perhaps 8,000 of those are white. Multiply by 10,000 - youhave 80 million gallons.

Your interviewer may then ask you how you would actually get that number, on the job,if necessary. Use your creativity - contacting major paint producers would be smart,putting in a call to HUD's statistics arm could help, or even conducting a small sample ofthe second calculation in a few representative towns is possible.


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5) What is the size of the market for disposable diapers in China?Here's a good example of a market sizing. How many people live in China? A billion.Because the population of China is young, a full 600 million of those inhabitants mightbe of child-bearing age. Half are women, so there are about 300 million Chinese women

of childbearing age. Now, the average family size in China is restricted, so it might be 1.5children, on average, per family. Let's say two-thirds of Chinese women have children.That means that there are about 200 million children in China. How many of those kidsare under the age of two? About a tenth, or 20 million. So there are at least 20 millionpossible consumers of disposable diapers.

To summarize:

1 billion people x 60% childbearing age = 600,000,000 people600,000,000 people x 1/2 are women = 300,000,000 women of childbearing age300,000,000 women x 2/3 have children = 200,000,000 women with children

200,000,000 women x 1.5 children each = 300,000,000 children300,000,000 children x 1/10 under age 2 = 30 million

6) How many square feet of pizza are eaten in the United States each month?

Take your figure of 300 million people in America. How many people eat pizza? Let'ssay 200 million. Now let's say the average pizza-eating person eats pizza twice a month,and eats two slices at a time. That's four slices a month. If the average slice of pizza isperhaps six inches at the base and 10 inches long, then the slice is 30 square inches ofpizza. So four pizza slices would be 120 square inches. Therefore, there are a billionsquare feet of pizza eaten every month.

To summarize:

300 million people in America200 million eat pizzaAverage slice of pizza is six inches at the base and 10 inches long = 30 square inches(height x half the base)Average American eats four slices of pizza a monthFour pieces x 30 square inches = 120 square inches (one square foot is 144 inches), solet's assume one square foot per person200 million square feet a month

7) How would you estimate the weight of the Chrysler building?

This is a process guesstimate - the interviewer wants to know if you know what questionsto ask. First, you would find out the dimensions of the building (height, weight, depth).This will allow you to determine the volume of the building. Does it taper at the top?


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(Yes.) Then, you need to estimate the composition of the Chrysler building. Is it mostlysteel? Concrete? How much would those components weigh per square inch? Rememberthe extra step - find out whether you're considering the building totally empty or withoffice furniture, people, etc.? (If you're including the contents, you might have to add 20percent or so to the building's weight.)

8 ) You are faced with two doors. One door leads to your job offer (that's the one youwant!), and the other leads to the exit. In front of each door is a guard. One guard alwaystells the truth. The other always lies. You can ask one question to decide which door isthe correct one. What will you ask?

The way to logically attack this question is to ask how you can construct a question thatprovides the same answer (either a true statement or a lie), no matter who you ask.

There are two simple answers. Ask a guard: "If I were to ask you if this door were the

correct one, what would you say?" The truthful consultant would answer yes (if it's thecorrect one), or no (if it's not). Now take the lying consultant. If you asked the liar if thecorrect door is the right way, he would answer no. But if you ask him: "If I were to askyou if this door were the correct one, what would you say," he would be forced to lieabout how he would answer, and say yes. Alternately, ask a guard: "If I were to ask theother guard which way is correct, what would he say?" Here, the truthful guard would tellyou the wrong way (because he is truthfully reporting what the liar would say), while thelying guard would also tell you the wrong way (because he is lying about what thetruthful guard would say).

-------------------------------------------------------------------------------------------Re: Info about investment banking and consulting

Now the +ve aspects of the consultancy job

this is writen by the same person who wrote the -ve sides of consultancy(and posted inbw forum)

-Amith

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Smart Co-Workers: The concentration of smart people is pretty cool. Consulting firmshave the luxury of hiring the smartest and most motivated people. This means you can

usually count on your co-workers to get their work done and it will be done to the higheststandard. You can have pretty intellectual conversations on everything from business topolitics sitting around a conference room table 14 hours/day. Don't get me wrong, thereare plenty of tools at consulting firms, but their aren't legions of unproductive middlemanagers like there are at f500 companies. You simple won't last long if you don't haveyour sh*t together.

Travel: You pretty much get status on most airlines. This means you forget what it is like


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to sit in coach. Your hotel rooms are always upgraded. You eat at the nicest restaurants intown a couple of times per week (you really need to join a gym). The funniest thing is tosee the female consultants pack on 20 pounds in six months. Also, after a year of constanttravel you an pretty much take a free two vacation (free airline tickets and hotels). I quitconsulting last year and I have in excess of 300,000 points from a year of travel (airline,

hotel, and amex). I will be taking a 2 week trip this year (free first class tickets, hotels,and rental car). All I need to pay for is food. Consulting travel paid for my honeymoon aswell.

The 5% of Projects are really cool: When you work on that one engagement where youreally do change the direction of the company or see the impact of your work it is prettycool. As a business analyst I got the opportunity to present my portion of the project tothe CEO of one of the most recognized companies in the world (no, he wouldn'tremember me from the legion of other consultants he hired that year). Even if you don'tget recognized for it, you know your esoteric forecasting model in excel helped someexecutive make a major decision. What is the coolest is if the decision makes the front

page of the WSJ. I recall a Partner breathing down my neck for a number out of afinancial model I was building for a merger. The next morning that number wasmentioned in a front page WSJ article regarding the deal. Stuff like that makes the jobcool. However, those are the climaxes of the engagements. You may spend months doingthe most mundane BS before you really see something cool. the problem is thatconsultants play the background. We get all the blame and none of the credit. you willwork on a lot of engagements that go no where. You will spend six months doinganalyses and the end result is a powerpoint deck that collects dust.

Pay: The pay is good. Certainly pays better than industry, at least in the beginning.

Steep Learning Curve: You will learn a lot very fast. You have to learn how to absorb aton of information and details about many different industries very quickly. Seriously.For instance, you may get called on a Friday to work on an engagement with aconstruction company. By Monday morning, you better be able to sound at least half wayknowledgeable about the industry drivers so you don't make an ass out of yourself infront of the client. One year in consulting is like three in industry.Freedom: While consulting is a corporate-like job, you do get a lot more freedom indown times. You usually don't have to stay at the office if you don't have any work to do.When you are on the beach (unstaffed), you can come in at 10 and leave at 2. Sometimesyou can work from home. Most Partners just care about you getting your work done. Ifsomeone ask you for a deliverable on Friday, you just better have it. I never felt likesomeone was always watching over me.

-----------------------------------------------------------------------------------------Re: Info about investment banking and consulting

more brainteasers for consulting interviews (source vault.com)

How many pay phones are there on the island of Manhattan?

There are two ways to handle this problem. First of all, you could estimate how many


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blocks there are in Manhattan, and assume that 75 percent of all blocks have a pay phone.(Remember, the interviewer didn't say they had to work.) If there are about 15 avenuesacross Manhattan, and if the island is 300 streets long, then there are about 4,500intersections. If every intersection indicates a block, then there are 4,500 blocks in thecity. That means 3,000 pay phones. Now add the extra step and subtract the size of

Central Park. Say that Central Park is 50 streets by six avenues - that means you lose 300blocks, or 200 pay phones. You have the figure of 2,800 pay phones. Now estimate howmany pay phones exist in bars, restaurants, schools, etc. There may be a total of 3,500pay phones in Manhattan. (This question is also sometimes used with estimating thenumber of manhole covers in Manhattan.)

How many weddings are performed each day in Japan?

Try a ground-up approach. In a city of 1 million (Kyoto), how many people are ofmarriageable age? Let's say 750,000. How many get married in a given year? Maybe 2

percent? That's 15,000. Now, the population of Japan is about 200 million, so multiply15,000 by 200 - and you get 300,000 weddings every year. Divide that by 365 and youget 822 weddings per day (on the average, though clearly some days are more popularthan others). To estimate this in your head, you could divide 300,000 by 3,000 (getting1,000), then take off another fifth. Around 800 would be close.

To summarize:

1 million people in Kyoto

750,000 of marriageable age

2 percent get married in the average year

750,000 x 0.02 = 15,000 marriages every year in Kyoto

200 million people in Japan

200 x 15,000 = 300,000 weddings per year

300,000/365 = 822 weddings per day (or approximately 800)

How many children are born every day in the United States?

Population of United States: 300 million (approximately). Half are women (150 million).Perhaps half of those are of childbearing age. How do you determine how many womenare pregnant at any given time? Well:

Let's say the average span of childbearing for a woman is 40 years


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The average woman has two children

So a woman is pregnant one year in 20, or 5 percent of the time

3.75 million women are pregnant every year

So divide by 365 - you get about 10,000 babies a day (actually, 10,273)

Do the extra step - round up for multiple births, so maybe 12,000

How much change would you find on the floor of an average mall?

This seemingly silly guesstimate was received by a job seeker at McKinsey. It's anexample of a guesstimate that is also a way to test candidate's "out-of-the-box" thinking.

First, estimate how many stores there are in the average mall - say, 50. Now, how manypeople enter the average store on the average day? A thousand? So if there are 50,000visitors to a mall daily, how many lose change? If one in 50, say, drops money (1,000people a day), how much is the average loss of change? Most amounts are probablysmall. People carry fewer quarters, for example, and are more likely to retrieve them. Solet's say that if a person is equally likely to drop a penny, nickel, or dime, then theaverage person who loses change loses a nickel. That means there would be $500 worthof change on the average floor. If half of that change has been picked up immediately,that would be $250 worth of change.

Also ask: Is there a fountain in the mall? If a fountain is considered to be the "floor" ofthe mall, the amount of change would obviously increase.

How many bottles of wine are consumed in the United States each week?

Determine:

The number of people in the United StatesThe number of adultsThe number of wine drinkersAverage number of glasses of wine consumed per wee.Number of glasses of wine in an average bottle(Extra step: You may wish to estimate how much wine is used for non-drinking purposes- cooking, for example. Also clarify whether the interviewer is speaking of standard-sizedbottle of wine.)

You could reasonably make the following assumptions:

There are about 300 million people in the United States:


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250 million are adultsPerhaps 220 million drink alcohol200 million drink wineThe average wine drinker drinks two glasses of wine a week,400 million glasses of wine consumers per week

About five glasses of wine in the average bottle80 million bottles of wine consumed in America each weekEstimate how many bottles wine is used for cooking - perhaps another 5 million85 million bottles of wine consumed per week

-AmithRe: Info about investment banking and consulting

Some jargons used in i-banking (source vault.com)

Agency: An independent company that sells insurance. It may be a one-person shop or a

large regional firm.

Angels: An important alternative to venture capital (VC) for startup financing. Angels areusually people who've made a killing somewhere and are now investing in seed-stageentrepreneurial ventures, typically at $10,000 to $250,000 a pop. Note to entrepreneurs:Before you jump on the VC fund-raising bandwagon, consider angels.

Annuity: A contract sold by an insurance company that pays guaranteed regular income,either for the rest of a person's life or for a specified period. Such contracts are often soldas part of a retirement plan package. In some ways, you can view it as the opposite of lifeinsurance. With life insurance, the company tries to determine how long it will be until an

insured person dies and they have to pay up. With the annuity, they also want to knowhow long it will be before a person dies, but this time because they have to makepayments until the insured party dies.

Asbestos: A mineral fiber used in insulation and fireproofing. If inhaled, it can cause aserious, often fatal lung disorder known as asbestosis. Affected miners, manufacturingemployees, and construction workers sued their employers, resulting in the largestproduct-liability settlement in history. Several manufacturers went bankrupt; insurers andre-insurers scrambled to pay claims while maintaining solvency. See also: tobacco.

At the end of the day: Venture capitalists love this expression because they are judged on

bottom-line results. For example: "At the end of the day, it doesn't matter that Rex is acollege buddy of Carter's. We'll still take a big hit on that one if the supercomputermarket is as dead as I think it is."

Bake-off: The meeting where groups of Hermes-tied and -scarved I-bankers (analystminions trailing behind, furiously scribbling into Palm Pilots) parade into a company'sboardroom one after another to pitch their underwriting or advisory services as the onlychoice for the company's upcoming deal. Also known as a "beauty contest."


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Bandwidth: An obsession for VCs investing in companies that are trying to speed up theInternet. Its generalized use: "Genex's CEO needs to focus better. His people just don'thave enough bandwidth to implement all of his crazy ideas."

Big swinging ****: Anyone who makes over a couple million for his or her firm. In anonline exchange, it just means "show-off." (Needless to say, avoid the term unless you'revery comfortable with your audience.) For more on BSDs, read Michael Lewis's book,Liar's Poker.

Bloomberg: Also known as Pandora's box, or the black box. This funky little computer,used daily by almost every investment banker, mutual fund manager, and broker, is aone-stop shop for a very wide range of company, economic, and market news.Bloomberg (the company that sells the service) was one of the first providers of real-timestock quotes, news feeds, and economic reports. Increasingly, other online services areencroaching on its turf, but some banks still prefer Bloomberg's "closed" system, and

encourage using it in conjunction with other Internet resources.

Once you learn its idiosyncratic navigational commands, Bloomberg gives you publishedestimated future earnings for specific companies and can graph performance. It tells youhow many shares of the company the president owns, as well as his or her salary. It alsoprovides current sports scores, the Vegas spread on every college game, cartoons, andphilosophical quotes about the market.

The blues: Blue Cross and Blue Shield organizations, which originally provided healthinsurance on a not-for-profit basis. Blue Cross organizations were run by hospital groups,Blue Shield by physicians. Historically, these companies were often given indulgenttreatment by regulators. But over the last 15 years they have been acting a great dealmore like full-fledged insurance companies, and their current regulatory treatment seemsto reflect it. Some Blues have converted their operations to for-profit, or they've beensold to HMOs or hospital companies. Some have purchased unrelated life and casualtylines.

Having BC/BS status doesn't mean much anymore, but companies that have it aretypically proud of their history and market position. Several Blues now have diversifiedbusinesses that may disqualify them from using the Blue Cross or Blue Shield logo. Oneinsider who once worked for a Blue plan tells us that he had two business cards: one thathe used in states where his employer was permitted to use the Blue Cross & BlueShield names, the other for everywhere else.

Break the buck: Money Market mutual funds are always denominated as one dollar pershare to make it easier to keep track of the amount you've invested and follow the yield.Because of some recent defaults by companies who issue money market securities, somemutual fund companies have had to step in with their own money to maintain the dollar-per-share price. If they hadn't stepped in, the defaults would have "broken the buck" andmoney market funds would have been considered less safe.


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Broker (insurance): A broker is an independent insurance agent who represents clientsrather than insurance companies. They are usually hired by corporations to find cost-effective insurance plans to cover corporate losses and oversee employee benefits.

Bulge bracket: Generally defined as the top five to ten full-service investment banks onWall Street. Firms move in and out of the bulge bracket over time. The name derivesfrom the top bracket on a Tombstone ad (see below) in the Wall Street Journal.

Burn rate: How fast a company is using up its capital. "They've got $2.4 million cash inthe bank and no more coming in the near future. At their current burn rate of $800,000per month, they've only got three months left."

Buy side/sell side: The buy side is home to the institutional buyers of securities,specifically asset-management firms, mutual funds, and pensions. At an investment bank,you work on the sell side, providing research and selling securities to investors, who are

on the buy side.10 great management ideas(from Fortune)An article in Fortune highlighted 10 management ideas that have had the most profoundimpact on how people and companies are managed. Not surprisingly, managementconsultants were behind many of them (and have ridden the wave of most of them). TheFortune list:

Scientific management: Frederick Taylor popularized the concept that productivityimprovements could be gained by breaking a process or system into steps, getting out thestopwatch, creating metrics, and measuring alternatives.

Assembly line: Henry Ford showed that the moving assembly line and mass production

could dramatically improve efficiencies. In 1909, Ford produced 14,000 cars; theassembly line helped increase output to more than 230,000 within five years.

Modern corporation: Alfred Sloan Jr., the man who built General Motors, set thestandard for the modern decentralized corporation - a headquarters staff that providesoversight and support to multiple divisions.

Leadership: Mary Parker Follett, a New England social worker trained in politicalscience, has been called "the prophet of management" by Peter Drucker for preaching tobusiness leaders in the 1920s and 1930s that employees should have a voice in howthings are done, as long as they share in the responsibility.

Brand management: When P&G executive Neil McElroy observed that the Camaysoap brand was being run over by Ivory in 1931, he advocated that the company shouldcreate a "one man, one brand" system. The plan worked, and he became the CEO of thecompany.

Management guru: This is the phrase most often used to describe Peter Drucker, theperson who has done more to legitimize management as a profession than anyone else.


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Labor rights: Walter Reuther, who guided the UAW for 34 years, fought with otherunion leaders to make the workplace safer and fairer. He championed the rights ofworkers to medical coverage, pensions, and unemployment benefits, and to have a voiceat the table.

Managing by the numbers: Harold Geneen, the chief of ITT and architect of themodern conglomerate, espoused that with good financial reports and disciplines, you canmanage anything.

Quality: W. Edward Deming, the father of the modern quality movement, challengedmany common American manufacturing practices in the 1940s such as quotas andinspections. When he got the cold shoulder, he took his concepts on the road and waswarmly received by many Japanese companies emerging from the war. In the 1980s, afterdecades of market share losses, American companies got on the bandwagon.

Reengineering: Michael Hammer and James Champy started a management revolution -and lined many consultants' coffers - when they released their manifesto, Reengineeringthe Corporation.

Knowledge management: In the information economy, knowledge and ideas are the realassets of business. There is increasing recognition that companies that can capture andharness the knowledge of their employees can create enormous value.

Adapted from "The Big Ideas," Fortune (November 22, 1999, p. 152).comparision of different kinds of consulting

What are the uppers and downers of large consulting firms vs. specialty boutiques vs.policy-focused firms? Here's an easy-to-understand guide.

LARGE MANAGEMENT CONSULTING FIRMS

UppersAbility to work on a diversity of projects and tasksIntelligent colleaguesHigh pay relative to other entry level jobs in health careAmple opportunity to transition into industry after a two- to 10-year stint

DownersMuch longer hours relative to other entry-level jobs in health care

Tasks involve difficult analytic thinking performed in relatively short timeframesNeed substantial previous experience in health care in order to specialize

Examples: Elites (Strategy)Boston Consulting GroupMcKinsey & CompanyBain & Company


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Others (Strategy, Operations, Systems):Deloitte and ToucheAndersen ConsultingPriceWaterhouseCoopersErnst & Young

BOUTIQUE FIRMS

UppersSmaller office might mean more responsibility and client contact for recent graduatesEasy ability to gain skills in a specific line of work ? these skills may be effectivelymarketed to larger consulting firms or potential industry employersFlexibility in terms of how long you want to stay (as opposed to the two- to three-year,"up or out" philosophy of some large consulting firms)Health care work only

DownersFewer formalized processes make it very easy to be ?out of the loop? on significantissues related to personnel and office politicsLess diversity in the range of projects and tasks you will encounterTend to be less stable financially than larger firms ? often run by individuals who are newto the pressures and rewards of running the own consulting firmEntry-level consultants are often paid less than at larger firms

Other key factorsTend to specialize in one line of products, services or clientsTend to be congregated in Washington DC, Boston and the West CoastOften started by individuals recently leaving industry or larger consulting firms

POLICY- AND RESEARCH-FOCUSED FIRMS

UppersMore scientifically rigorous, publishable workGood non-MBA graduate school opportunitiesFewer hours than most other consultants

DownersLess pay than most large management consulting firmsMay get labeled as data person, and never see the light of day

Major playersThe Lewin Group, Inc.Abt Associates, Inc.Covance, Inc.Mathematica Research, Inc.


15/26

(source wetfeet.com)

-AmithRe: Info about investment banking and consulting

Hi,

since we're on the topic of consultancy, I wud like to ask ppl if they have heard of thiscompany called Inforte Ltd. (www.inforte.com) Its a primarily US-based customerstrategy and solutions consultancy firm. They have recently set up an office in India. Ihave landed a job there through campus placement. The job profile is that of "consultant".The pay is quite good (take home of around 26-27 K p.m starting) These guys will berecruiting from IITB, IITD and IITK alone.

But the thing is that inspite of attending their PPT and going through their site, Im yet tofigure out what this company actually does. The kind of ambiguous words they use("custom and packaged solutions","systems implementation projects, includingconfiguration, prototyping, system testing and rollout support") confuse me to no end.

They have a long list of clients and claim that they help the clients develop "strategy".These guys are going to train us in some CRM package called Siebel. Is it some differentversion of a coding job ? Or will there be more to it than coding ?

I have already asked some ppl about this, but if someone here is into consultancy, I wouldappreciate if that person could help me out with what this kind of job would basicallyinvolve. Im still not able to decide whether to go for this job or not (despite the pay) andabout the future prospects of this kind of job. If someone knows something, pls do help.

thanks

the freak__________________"Nothing can withstand the power of the human will if it is willing to stake its veryexistence to the extent of its purpose." - Benjamin Disraeli

typical salarirs in investment banking

Here is bit more interesting statistics

(source vault.com )

---------------------------------------------------------------------------------------------

Analysts

When it comes to analyst pay, much depends on whether the analyst is in New York ornot. In the City, pay often begins for first-year analysts at $45,000 per year, with a
http://www.inforte.com/http://www.inforte.com/


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maximum annual bonus of approximately $20,000. While again, this seems to be a lot fora 22-year-old with just an undergrad degree, it's not a great deal if you consider per-hourcompensation. At most firms, analysts also get dinner every night for free if they worklate, and have little time to spend their income, often meaning fat checking and savingsaccounts and ample fodder to fund business school down the road. At regional firms, pay

typically is 20 percent less than that of their New York counterparts. Worth noting,though, is the fact that at regional firms 1) hours are often less, and 2) the cost of living ismuch lower. Be wary, however, of the small regional firm that pays at the low end of thescale and still shackles analysts to their cubicles.

While the salary generally does not improve much for second-year analysts, the bonuscan double for those second-years who demonstrate high performance. At this level,bonuses depend mostly on an analyst's contribution, attitude, and work ethic, as opposedto the volume of business generated by the bankers with whom he or she works.

Associates

Associates are at least much better paid than analysts. A $75,000 salary starts them off,and usually bonuses hit $20,000 to $25,000 in the first six months. (At most firms,associates start in August and get their first bonus in December.) Newly minted MBAscash in on signing bonuses and "forgivable" loans as well, especially on Wall Street.These can amount to another $25,000 to $50,000, depending on the firm, providing totalcompensation of up to $150,000 for top firms. Associates beyond their first year begin torake it in. In the second year, associate bonuses range from $50,000 to $150,000. Atypical second-year compensation package is $80,000, with a bonus in the $100,000 to$125,000 range.

Outside of New York, regionals offer first-year packages like 65-25-20. That is, $65,000salary, $25,000 bonus after six months, and a $20,000 signing bonus, for totalcompensation of $110,000. For second-year associates, bonuses tend to range from$50,000 to $90,000 on top of a $70,000 salary at regional firms. Those associates thatmanage to land jobs with Wall Street firms but in a regional office really earn top pay, ascost of living drops dramatically outside of the City. Until the VP level, bonuses typicallyare rewarded based on job performance appraisals rather than profits of the group inwhich they are working.

Vice Presidents

The formula for paying bankers varies dramatically from firm to firm. Some adhere torigid formulas based on how much business a banker brought in, while others pay basedon a subjective allocation of corporate finance profits. No matter how compensation isstructured, however, when business is slow, bonuses taper off rapidly. For most bankers,typical salaries may range from $100,000 to $200,000 per year, but bonuses can besignificantly greater. Total packages for VPs on Wall Street often hit the $350,000 levelin the first year - and pay can skyrocket from there.


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Directors/Managing Directors

Top bankers at the MD level might be pulling in bonuses of up to $1 million or more ayear, but slow markets (and hence slow business) can cut that number dramatically.

Average regional I-banking firm MDs may earn from $300,000 on up, with the ceilingdetermined only by the amount of business they generate. It is important to realize thatfor the most part, MDs act as salespeople, and are paid on commission. For topperformers compensation can be almost inconceivable. For example, in 1999, WarburgDillon Read hired health care banker Benjamin Lorello away from Salomon SmithBarney with a reported package of $70 million over five years.

------------------------------------------------------------------------------hey freakazoid,i'm not aware of inforte as the company itself but the company basically does stuff liketrilogy or the erp wings of wipro & infosys. what this means is that you take a ready-

made package like SAP , Siebel, or our very own Ramco( it has also developed a ERPsimulation package on it's own). basically your job will be to "master" the seibel CRMpackage in the training period. then onwards look forward to great pay & absolutelyshitty hours for they will make u work like a dog.(10-12 hrs is par for course). u basicallywill be in a team of around 6-7 ppl & u will almost always be up against a deadlineor 2. future in this line is absolutely dependent on how the seibel CRM package performsin the future. if it's a hit , as one of the few ppl with industry experience in this field, ucan packages of 10 lacs - 14 lacs pa, after 8 years or so.there is no stratergy involved in your job, ur boss's boss will take care of that. the tag of"consultant" is a running joke , don't take it seriously. u will have to writeAPIs( application programming interfaces) in order to take advantage of the software"customisable" features.here's a thought man, this job will be really hectic , will u be able to handle the pressureofCAT & this job together?

03.05.05

Current Investment Banking scenario in India

Unlike Goldman Sachs, Merrill Lynch and Morgan Stanley, Citigroup and JPMorgan donot have joint ventures with local partners in India's booming investment banking market.But they have climbed to the top of league tables for mergers and acquisitions as well asstock deals on the back of strong corporate ties.

"The strength of the Citigroup platform is the 1,000 plus corporate relationships in Indiathat we have," said Pramit Jhaveri, head of investment banking in India for Citigroup.

Both groups are competing intensely for investment banking fees that are expected togrow by up to 40 percent this year, fueled by an economy growing at about 7 percent andforeign institutions flocking to invest.

After a relatively late launch of investment banking in India since 2000, Citigroup has
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grown to be the top M&A adviser for the last two years. JPMorgan, meanwhile, jumpedto third in 2004 after not even reaching the top 10 in 2003.

The story is similar for securities underwriting. Citigroup has become the world's largestsecurities underwriter, with JPMorgan and Switzerland's UBS using their own

relationships to build business.

To be sure, Goldman, Merrill and Morgan Stanley remain strong in India. They were thetop three underwriters of stock offerings last year as equity issuance rose to $9.95 billionfrom $1.90 billion, according to data firm Dealogic.

One key advantage of their joint venture structure is retail distribution.

Morgan Stanley has teamed up with JM Financial Group, Goldman is aligned with KotakMahindra Bank Ltd. and Merrill works with DSP Financial Consultants Ltd.

"A year ago, the conventional wisdom in our industry was if a company wanted to raise$200 million, they had to leave the country," said Rajeev Gupta, joint managing directorfor DSP Merrill. "The threshold for going overseas today is $2 billion, not $200 million."

The local network enjoyed by the joint ventures becomes more important as the domesticmarket gets bigger.

"We can give (companies) a choice of which market fits their needs," said Gupta. "Theyknow you are not giving them a recommendation linked to their limitations."

But the stand-alone banks are gaining momentum with deliberate expansions. In the1990s, JPMorgan ended a joint venture with ICICI Bank Ltd. in 1998 and set out on itsown, taking many of the venture's bankers with it.

By beefing up its investment banking staff, the bank has been able to win high-profiledeals such as the $1.17 billion IPO of Tata Consultancy Services Ltd.

"Basically the (India) story's a great one, and it's getting better," said JPMorgan seniorcountry officer Dominic Price. "You can't ignore 7-percent plus growth."__________________Kiss is a lovely trick designed by nature to stop speech when words become superfluous

websites

www.careers-in-finance.com

www.vault.com
http://www.careers-in-finance.com/http://www.vault.com/http://www.careers-in-finance.com/http://www.vault.com/


19/26

www.wetfeet.com

for all the scoop on obanking ..if u want the simplified version pf what u wanna know,pm me ....

M&A

Hi everyone,

I guess with astronomical salaries and overseas postings, Investment Banking has becomethe preferred choice of career for a BSchooler. Anyways, saw the discussion and thoughtmaybe i could be of some help.

I guess a little background is necessary. I have a B.Com. with an Honours in SecurityAnalysis and Portfolio Management and currently I'm working with Reuters as a MarketAnalyst, handling Public Equity offerings(PEO) and Mergers and Acquisitions(M&A) inIndia. Luckily, for me I converted an IIM-A call and will be going there shortly. The flip

side was that i had to let go of a great job...anyway thats another story...

Basically, an investment bank has 4 arms:

Research - Stocks, Bonds, Gilts etcAdvisory - Wealth management, consultancy etcM&A and PEOTrading

The M&A division is the most glamorous, of course and it encompasses Advisory on

possible targets that would fit a client's strategy (synergy), due diligence on the company

to see compatibility(at the same time making sure the press doesn't get wind of it )fairness opinion and finally, legal conformity and proper valuation.

I would say that the recent Holcim acquisition of ACC is a great case study for anyonewanting to study M&A. In India M&A activity comes under the purview of SEBI (underthe SEBI Substantial Acquisitions of Shares and takeover(SAST)Regulation, 1997 andthe Disclosure and Investor Protection(DIP) Guidelines). Some important provisions ofthese are as follows:

Anyone acquiring more that 5% stake in a company will have to make a disclosurestatement and a public notice with the Exchange. As soon as his/her shareholding reaches15%, he/she will have to make an Open Offer to the remaining shareholders at or abovethe price he has paid for the 15%, so that incumbent shareholders get an ExitOppurtunity. After 15%, for every 5% he has to make a 20% open offer. These rules areslightly different for other countries.(for e.g in the UK the trigger point is 30%)

More on M&A Tactics(the interesting part) later.
http://www.wetfeet.com/http://www.wetfeet.com/


20/26

KM.Holcim-ACC deal

In the first stage, Holcim will pay about $200m for the 40% in Ambuja Cement India(ACIL), which is held by private equity investors.

ACIL is a holding company that holds 13.8% ACC stake that Gujarat Ambuja boughtfrom the Tata group in 1999. Gujarat Ambuja owns 60% in this outfit, i.e ACIL

In the second stage, Holcim will pay about $600m for new shares to be issued by ACIL.This will take the Swiss MNC's stake in ACIL to about 67% and dilute Gujarat Ambuja'sholding to 33%, from the current 60%.

The funds that ACIL secures from this issue will then be used to make an open offer toACC shareholders for 36.21% of their stake at Rs 370 per share. If the offer is successful,ACIL, owned majority by Holcim, will have full control over ACC.

Hope that helps. Its more complex, of course, but this should do for now.

I-banking-General Gyan

Hi Everyone,

Just some general gyan on I-banking..

Generally, the breakdown of an investment bank includes the following areas:

Corporate Finance

The bread and butter of a traditional investment bank, corporate finance generally performs two different functions: 1) Mergers andacquisitions advisory and 2) Underwriting (Equity Capital Markets). On the mergers and acquisitions (M&A) advising side of corporatefinance, bankers assist in negotiating and structuring a merger between two companies. If, for example, a company wants to buy another firm,then an investment bank will help finalize the purchase price, structure the deal, and generally ensure a smooth transaction. The underwritingfunction within corporate finance involves shepherding the process of raising capital for a company. In the investment banking world, capitalcan be raised by selling either stocks or bonds to investors.

Sales

Sales is another core component of any investment bank. Salespeople take the form of: 1) the classic retail broker, 2) the institutionalsalesperson, or 3) the private client service representative. Brokers develop relationships with individual investors and sell stocks and stockadvice to the average Joe. Institutional salespeople develop business relationships with large institutional investors. Institutional investors arethose who manage large groups of assets, for example pension funds or mutual funds. Private Client Service (PCS) representatives liesomewhere between retail brokers and institutional salespeople, providing brokerage and money management services for extremely wealthyindividuals. Salespeople make money through commissions on trades made through their firms.


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Trading

Traders also provide a vital role for the investment bank. Traders facilitate the buying and selling of stock, bonds, or other securities such as

currencies, either by carrying an inventory of securities for sale or by executing a given trade for a client. Traders deal with transactions largeand small and provide liquidity (the ability to buy and sell securities) for the market. (This is often called making a market.) Traders makemoney by purchasing securities and selling them at a slightly higher price. This price differential is called the "bid-ask spread."

Research

Research analysts follow stocks and bonds and make recommendations on whether to buy, sell, or hold those securities. Stock analysts (knownas equity analysts) typically focus on one industry and will cover up to 20 companies' stocks at any given t ime. Some research analysts work onthe fixed income side and will cover a particular segment, such as high yield bonds or U.S. Treasury bonds. Salespeople within the I-bankutilize research published by analysts to convince their clients to buy or sell securities through their firm. Corporate finance bankers rely onresearch analysts to be experts in the industry in which they are working. Reputable research analysts can generate substantial corporate finance

business as well as substantial trading activity, and thus are an integral part of any investment bank.

Commercial banking vs. investment banking

While regulation has changed the businesses in which commercial and investment banks may now participate, the core aspects of thesedifferent businesses remain intact. In other words, the difference between how a typical investment bank and a typical commercial bank operateis simple: A commercial bank takes deposits for checking and savings accounts from consumers while an investment bank does not.

Commercial banks

A commercial bank may legally take deposits for checking and savings accounts from consumers. The typical commercial banking process isfairly straightforward. This process is debt driven.

Importantly, loans from commercial banks are structured as private legally binding contracts between two parties - the bank and you (or thebank and a company). Banks work with their clients to individually determine the terms of the loans, including the time to maturity and theinterest rate charged. Your individual credit history (or credit risk profile) determines the amount you can borrow and how much interest youare charged. The same process applies to loans to companies as well - the rates are determined through a negotiation between the bank and thecompany.

Lets understand how a bank makes its money. On most loans, commercial banks in the U.S. earn interest anywhere from 5 to 14 percent. Askyourself how much your bank pays you on your deposits - the money that it uses to make loans. You probably earn a paltry 1 percent on achecking account, if anything, and maybe 2 to 3 percent on a savings account. Commercial banks thus make lots of money, taking advantage of


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the large spread between their cost of funds (1 percent, for example) and their return on funds loaned (ranging from 5 to 14 percent).

Investment banks

An investment bank operates differently. An investment bank does not have an inventory of cash deposits to lend as a commercial bank does.In essence, an investment bank acts as an intermediary, and matches sellers of stocks and bonds with buyers of stocks and bonds.

Note, however, that companies use investment banks toward the same end as they use commercial banks. If a company needs capital, it mayget a loan from a bank, or it may ask an investment bank to sell equity or debt (stocks or bonds). Because commercial banks already have fundsavailable from their depositors and an investment bank does not, an I-bank must spend considerable time finding investors in order to obtaincapital for its client.

Investment banks typically sell public securities (as opposed private loan agreements).

Hey...

seems a really informative post for all those aspiring MBAs and enthusiasts ... into theworld of IB! well... moi a novice on the subject n would luv to know more about thesame.

Keep up the good work - kabmilega and goelrinku - n keep the Gyan Ganga flowing!

BTW :

Quote:

After 15%, for every 5% he has to make a 20% open offer.

KM.... can u explain this part again... wat do u mean when u say that after 15%... @every 5% hes to make 20% offer?? 20% of wat?! n to whom ... shareholders... forexiting?

__________________~MoNiL~

Success is going from Failure to Failure without loss of Enthusiasm - Winston Churchill


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Holcim - ACC imbroglio!

Quote:

Originally Posted by kabmilegaIn the first stage, Holcim will pay about $200m for the 40% in Ambuja Cement India(ACIL), which is held by private equity investors.

ACIL is a holding company that holds 13.8% ACC stake that Gujarat Ambuja boughtfrom the Tata group in 1999. Gujarat Ambuja owns 60% in this outfit, i.e ACIL

In the second stage, Holcim will pay about $600m for new shares to be issued by ACIL.This will take the Swiss MNC's stake in ACIL to about 67% and dilute Gujarat Ambuja'sholding to 33%, from the current 60%.

The funds that ACIL secures from this issue will then be used to make an open offer toACC shareholders for 36.21% of their stake at Rs 370 per share. If the offer is successful,ACIL, owned majority by Holcim, will have full control over ACC.

Hope that helps. Its more complex, of course, but this should do for now.

KM.

"There's method in my madness" - Hamlet.

Hie KM...

ur knowledge in IB n MnA is commendable. particularly the lucidity with which the

Holcim-ACC web has been untwined n put forth by u!

okies.... well.... had certain doubts reg the same deal.

why did Holcim take the ACIL route to acquire control over ACC? cudnt it have donedirect purchase of ACC stake from ACIL n open markets??! coz out here ..... theres a lotof waste on time n resources... ACIL coming out with new lot of shares ... the SEBItaking its own sweet time for approval of the same .... etc?

BTW... wats the company profile of ACIL? just a Investment comapny with a GujaratAmbuja support... like Pilani investments (if i remem the name corrrectly ) which has astake in majority of the Birla Group companies.. n now under the caretaking of infamousR.S.Lodha! ... guess the battle betwen Lodha n Birlas is to acquire comtrol of this firm!

__________________~MoNiL~

Success is going from Failure to Failure without loss of Enthusiasm - Winston Churchill


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Contributions 2 PG--> ProceedHERE!!Whoa! is this my 15 seconds of fame?

reachmonil, good question...let me explain

Lets say you acquire 20% in Pagalguy.com ltd with the remaining 80% being held byall the junta who post here. Then, as per Indian regulation, you would have to make a20% Open offer to the remaining 80% shareholders. lets say that the price you havequoted is a little on the lower side, so the junta think they are better of staying investedinto the company than tendering their shares to you...so you end up with only 12% of theproposed Tender offer(i.e. 12% tender their shares)...then you end up with a shareholdingof 32% after the Tender Offer closes.

Now, for every 5% you buy in PG.com Ltd, you'll again have to make a 20% offer untilyou reach 75%, after which you will have to do, what in M&A terminology is called a'squeeze out' i.e. buy the remaining 25% and delist the shares.

Hope that helps....(BTW Delisting is done throught the Reverse Book BuildingProcess....I'll come to that later)

why did Holcim take the ACIL route to acquire control over ACC? cudnt it have done

direct purchase of ACC stake from ACIL n open markets??! coz out here ..... theres a

lot of waste on time n resources... ACIL coming out with new lot of shares ... the SEBI

taking its own sweet time for approval of the same .... etc?

Holcim wanted a foothold in both the top cement companies in india i.e Gujarat Ambujaand ACC, and the best way to do this was by acquiring majority stake in ACIL. ACIL is asort of Investment company, you're right and in this case it held shares in the right co.ACC.

KM.In case the Tender Offer is over subscribed (i.e. >20% tender their shares), as was thecase in the recent Tender Offer of United Breweries by Scottish and Newcastle Plc, thenthe tendered shares will be pro rated so as to make sure that only 20% is allowed to beacquired.

No, there is no time gap...but ideally you would like to consolidate your position after thewhole process and then go to your I-Banker again, when you feel the need for better

control or when you have more cash.

Lets come to some tactics used by both the parties now:

These are some of the Tactics of the Acquirer and Target in an M&A:

Acquirer
http://www.pagalguy.com/cat/showthread.php?t=5747http://www.pagalguy.com/forum/http://www.pagalguy.com/cat/showthread.php?t=5747http://www.pagalguy.com/forum/


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Creeping PurchaseBlock PurchaseGreenmailLock upProxy Fight

Stock Lock upAsset Lock up

Target (more interesting in a Hostile Takeover)

Poison Pill(Back end and Flip Over)ESOPPac ManRecapitalisationRepurchase

Scorched earthSelf tenderWhite Knight

KMWith the strategic stake in ACIL Holcim will be in a Kind of Joint Venture with GujAmb(GACM)...Another thing is that the Agreement with GACM has a provision whichgives GACM the option of selling their remaining 33% in ACIL to Holcim in June...Laterthe two can form a consortium and take full control of ACC. So, in a way Holcim is in agreat position. Another thing, you may have noticed is that GACM has secured a 50%stake in ACC without paying a single penny to anyone...a superb move on their part.

Coming to your 1st point, if the Tender Offer(TO) is oversubscribed, then everyshareholder will get a pro rated acceptance of their tendered shares. for e.g if you havetendered 30 shares and the TO is oversubscribed twice then the acquirer will accept only15 shares from your 30.

Coming to tactics: Lets start with Creeping Purchase - creeping Purchase is when anInvestor/company starts buying shares in small quantities so as not to trigger disclosurenorms. For e.g in the Indian Pvt banking industry no FII can buy more than 5%in a yearwithout RBI Approval. So if you're a Foreign Pvt bank looking to grow inorganically inIndia by acquiring an already establlished Pvt. bank, then you can acquire 4.99% everyyear till you reach 14.99%. A Superb example would be the HSBC Bank Purchase in UTIBank.

More later.One question from your line of Gujarat Ambuja (GACM) getting 50% without having to payanyone. Well as I understand the holding in ACC will be thru ACIL in which GACM has only 33%left after Holcim will raise its stake to 67%. Holcim being the majority equity holder in the ACIL will


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have the "Say" in ACC. So dont get how the 50% can be ascribed to GACM alone after the Openoffer of 36.21% comes through.

Also Read todays Business Line, where in the move by The Chatterjee Group (TCG) andAccess Industries Inc. (Owned by Russian born Oil Billionaire Leonard Blavatnik) is beingdiscussed and explained with respect to their buy out of the Assets and Debts of the $ 8.4 Billion

Dutch Petrochemical giant Basell NV (a 50:50 JV between Royal Dutch/Shell Group and BASFAG of Germany) for $5.7 Billion. The deal was worth over Rs. 25000 crores, so is by far thebiggest acquisition by an Indian company ever which overtakes that of OVLs 20% stake ($ 1.7billion) buy in Sakhaklin Oil fields, Reliance Groups buyout of Flag Telecom and the Tataacquisition of Tetley and Natsteel.

Can you please give your analysis of this move.!!!!

Creeping acquisition is clear.

I can give a local example where in the Ahmedabad based Torrent Group (of Torrent Pharma

fame) has selected this method to increase its stake in the Utility Company, The AhmedabadElectricity Company Ltd (Now known as Torrent Power AEC Ltd.) from @ 44% to reach 51%. TheCompany in the gist of the Balance Sheet printed in leading dailies gives details in each quarteron this, saying that the promoters have purchased so and so % shares by the creepingacquisition method.

Cheers!!Shankx~

__________________~Love me the most when I deserve it the least, since that is when I need it the most~Fee dilemma

Investment banking is supposed to be a very well paying job. This implies the investmentbanking firms make a lot of money in deals.

The thing i wanted to know is how is their fees calcualted during M&A. Is it a lumpsumamount amounting to some percentage of the deal or a fixed amount not depending uponthe deal.

Also, if suppose one firm is acquiring 20% of another firm, then on what basis do theinvestemnt banking firms charge fees from both the clients?

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