Symbiont Newsletter

8/7/2019 Symbiont Newsletter

1/17

Po tM rerIntegrat

is e g

on

Failure of M&ABreak Ke Baad

Creating a greater visibility

Pearson & Tutor Vista

Overfill your APPETITE

M A - G r o t h& w

Merck & Ranbaxy

Hungry Kya????

2010 for M&A

Volume III

Issue II

January 2011

YMBI NT

BANGALORE


2/17

SYMBIONT is a monthly newsletter dedicated exclusively to Mergers&

Acquisitions. Symbiont also has an online forum for related discussions.

The newsletter has always aimed to enlighten the readers about the

current happenings in the M&A circuit along with interesting add ons like

crosswords,terminologies,brain teasers and many more.

Written by -

Simon Arpa Gomes

You can ask some questions that might uncover it, but if you can'tget to it, you can't get to it.

INTRODUCTION

HELLO!!!

OUR MENTOR- PROF. ANIRBAN GHATAK

SYMBIONT CO-ORDINATORS

Simon GomesChandana D

DESIGNER

Nikita .H. Nagpal

EDITORS

Iti Mehrotra

Charumitra Nagpure

Neha Choudhary

CROSSWORD TEAM

Aarthi K.

Neha Singh

QUIZ TEAM

Sonamon Patra

Raushan Kumar

ARTICLE WRITERS

Sonamon Patra

Iti Mehrotra

Suyash Kejriwal

Sanghamitra Gosh

Smrata Singh

Minu Jha

Prachi BhatnagarGopu Karthick

Shubhajit Ghoshal

Arun V. M.


3/17

Why is it that most mergers and acquisitions fail and do not live upto their

expectations? There were about 30,000 company acquisitions annually in recentyears which amount to 80 transactions a day. The high number of acquisitions wasthe result of many factors. Globalisation and the ensuing need to have a globalpresence were some of them, just as accelerated technological change and costpressures in saturated markets were. Yet, every second acquisition failed to achievethe desired results. Is it the finances or the technology?

Mostly, it is poor execution of the actual combining of the companies involved. Mergerfailures usually revolve around people issues like loss of key staff, culture clash, poorcommunication and interaction between employees of the merging organizations.Several studies indicate that turnover of senior management of the company being

acquired is often negatively correlated with performance. At the same time, there isnow a lot of evidence that, effective post merger integration is the largest valuecreator in the M&A process. It is, therefore, now well accepted that how you manageyour acquisition is perhaps more important than what you buy. This new finding isparticularly relevant to Indian companies which often have superior systems ofgovernance, better trained employees and exposure to more modern capitalinvestment that their targets. In fact, the vast majority of less heralded acquisitionsinvolve a well managed, usually listed Indian company buying mid-sizedorganizations in Europe or the US. This difference in governance quality andexposure to best practice can be further reinforced several acquiree firms alsohave constraints on capital, may have stopped hiring, and could well suffer from low-

employee morale. Most large Indian acquirers are subject to a variety of governancechecks, particularly if they are listed on stock exchanges.

Furthermore, even low-growth businesses do have many opportunities for positiveNPV (net present value) projects with relatively low payback periods. Companieswhich are up for sale tend to become the victims of resource constraints. Like mostmergers, ArcelorMittal faced the challenge of integrating management teams; sales,marketing, and product functions; production facilities; and purchasing operations.ArcelorMittal top management set three driving objectives before undertaking thepost merger integration effort. These included the following:(1) Achieving rapid integration.

(2) Managing effective daily operations executed.(3) Accelerate revenue and profit growth.

The third objective was viewed as the primary motivation for the merger. The goalwas to combine what were viewed as entities having highly complementary assetsand skills. This goal was quite different from the way Mittal had grown historically,which was a result of acquisitions of turnaround targets focused on cost andproductivity improvements. Perhaps the only silver lining to the Indian companieswould be the fact that they are the largest spenders on a variety of capital goods,giving them a procurement clout in excess of their size. This is particularly true inareas such as information technology (IT) and telecom where our markets are

growing much faster than others.

One buys a company not only because of what it is, but what one can make of it.

POST MERGERINTEGRATIONSYNERGY

Written by -

Simon Arpa Gomes


- the science of

1


4/17

A very common phenomenon that we see today across organizations is M&A. M&Asis a indispensable strategic tool for expanding product portfolios, entering newmarkets, acquiring new technologies and building new generation organization withpower and resources to compete on a global basis.The past few years have seen a steep increase in cross-border merger & acquisition(M&A) activity - Vodafone's $12.9-billion acquisition of 67% stake in Hutchison Essar;Tata Steel's $12-billion buyout of Corus; and Hindalco's $5.9-billion Novelis Inc(Canada) deal. However, despite the synergies and competitive advantage that M&Aoffer, they can also have a disruptive effect on organizations if not managed withutmost attention and care.

In theory, 1+1 = 3 sounds great, but in practice, things can go awry. Failure of mergers

may be qualitative-the reason why the companies went for mergers mayn't work outthe way they wanted or it may be quantitative the deterioration in the operatingresults rather than improvement because of which the shareholders suffer.

Some of the reasons for failure of Mergers and Acquisitions are:

Excess Premium : Under a competitive bidding stage a company may tend to paymore in order to acquire a company. But more they pay more they have to work inorder to keep their shareholders happy. When the price paid is too much, how well thedeal may be executed, the deal may not create value.

Size Issues: A mismatch in the size between acquirer and target lead to pooracquisition performance.

Lack of research: Carelessly carried out research about the acquisition destroys the

acquirer's wealth.Cultural Cohesions: Cultural fit between an acquirer and a target is one of the mostneglected areas of analysis prior to the closing of a M&A deal. If prior care is not takento convince the employees, to accept the mergers and acquisitions it would result inincreased attrition rate.

The Failure story of M&A can be best explained with the help ofDAIMLERCHRYSLER merger, a cultural mismatch.

A German automaker Daimler-Benz and the American auto manufacturer Chryslergroup merged in 1998 for a $36 billion consideration. This merger of equals wasbelieved to benefit each unit from the other's strengths and capabilities. Stockholders

in both companies overwhelmingly approved the merger and the stock prices andanalyst predictions supported their views.

Performance after the merger, however, was entirely different, particularly at theChrysler division. There was huge rate of turnover among management at acquiredfirms and stock price fell roughly by one half. Differences in culture between the twoorganizations were largely responsible for this failure. Operations and managementwere not successfully integrated .While Daimler-Benz's culture stressed a moreformal and structured management style, Chrysler favoured a more relaxed,freewheeling style. In addition two firms followed different pay scales and travelexpenses. All these factors led to the failure of DAIMLERCHRYSLER merger.

Thus, it can be clearly stated that it's not the success stories which always follows

with M&As, there may be failures, if not managed with due care and regardand thekey to successful integration and change management is carrying the peoplealongboth in the acquired and acquiring company.

Failure ofM&A

Written by -

Chandana


2


5/17

When it comes after 26 years of a seemingly happy marriage, talk of separation usually

sparks more questions than answers. Birth of HERO HONDA lays back in mid-1980s whenthe Indian government regulations changed, which permitted foreign companies to enter the

Indian market through minority joint venture. Four Indo-Japanese joint ventures: Hero Honda,

, Bajaj Kawasaki and entered the Indian

market.

Hero is the brand name used by the Munjal brothers for their flagship company Hero Cycles

Ltd. A joint venture between the Hero Group and Honda Motor Company, Japanese company

was established in 1984 as the 'Hero Honda Motors Limited' at India. Munjal family

and group both owned 26% stake in the Company.

In December 2010, the Board of Directors of the Hero Honda Group decided to terminate the

joint venture between Hero Group of India and Honda of Japan in a phased manner. The Hero

Group of India would buy out the 26% stake of the Honda in JV Hero Honda. With this, Munjalfamily gets entire 52% stake in the company. The possible reasons, according to experts for

this 'divorce' are the increasing cost of royalty and technology (R&T) and the growing

presence and market share of Honda Motorcycle & Scooter India (HMSI), a 100% subsidiary

of Honda.

Features of Break-up of Hero- Honda:

Transaction value of the deal is approximately Rs.9100 cr.

Hero Group can use 'HONDA' brand name on new models launched by the group till 2014.

TVS Suzuki Kinetic Motor Company (Kinetic Honda)

Dharuhera

Honda

BREAK KE BAAD

Written by -

Sonamon Patra


E BA DBR AK AE

SWOT ANALYSIS OF THE BREAK-UP

STRENGTHS WEAKNESS

THREATSOPPORTUNITIES

Ability to understand customerneeds and wantsRecognized and established brand

nameModels like SPLENDOR & PASSIONCash reserves of Rs.4,400 crores,

with which Hero group can build itsown R&D facility.Use of HONDA brand name till 2014

for its new models.

Hero group will start exporting to

overseas markets such as Latin

America, Africa and South East Asia.

Its rival Bajaj Auto exports mainly to

Africa.

Expansion of target market (include

women).Become Indias leader in the two -

wheeler market.

Bajaj Motors

HONDA motors

Lack of R&D culture in HERO

group.

Rebranding & Repositioning the

brand HERO.

3
http://en.wikipedia.org/wiki/Hondahttp://en.wikipedia.org/wiki/TVS_Suzukihttp://en.wikipedia.org/wiki/Kinetic_Hondahttp://en.wikipedia.org/wiki/Dharuherahttp://en.wikipedia.org/wiki/Hondahttp://en.wikipedia.org/wiki/Hondahttp://en.wikipedia.org/wiki/Dharuherahttp://en.wikipedia.org/wiki/Kinetic_Hondahttp://en.wikipedia.org/wiki/Kinetic_Hondahttp://en.wikipedia.org/wiki/TVS_Suzuki


6/17


7/17

Pearson one of UK's biggest publishers took a complete control of the Bangalore-based onlineeducation firm. They would pay Rs. 577 crore to raise its stake from 16% that it already had to a 76%

stake in the company.The deal is one of the biggest in the education space which values the five-year-old company at 960crore and gives private equity firm Sequoia a more than seven times return on its original investment.In 2009, Pearson had bought 16% in the company for Rs. 54 crore and now they are increasing theirstake to 76% by paying an additional Rs 577 crore. Pearson in the coming month would acquire anadditional 4% of the equity by buying out shares of the minority shareholders. Pearson will ultimatelyown 80% of the company and will function as an independent entity with the balance of 20% ownedby promoters and the management team.TutorVista was founded in July 2005, Bangalore, by husband and wife entrepreneur duo K. Ganeshand Meena Ganesh. The company, Tutorvista has 800 employees and a roster of 2,000 tutors. Itoperates in four areas providing coaching assistance to 10,000 students every month across anetwork of 60 centres in South India. The different streams of operation include digital learningcontent, brick-n-mortar tutorial centres and formal schools. The focus has been on providing qualityeducation to students in the US and UK through voice-over-internet-protocol (VoIP). Tutor Vista hiresteachers in India to teach students in these locations.

This acquisition will bolster Pearson's tutoring business as TutorVista provides English languagecoaching courses for university entrance exams and out-of class tuition to K-12 school children for SAT(scholastic aptitude/assessment test), ACT (American College Testing), AP and other exams. It alsoprovides a full suite of services to K-12 schools and uses VoIP to connect instructors in India withschool and college students in North America. It also reaches 3,300 classrooms by supplying digitalcontent and technology platforms to private and government schools in India.

Reasons for Acquisition:This acquisition underlines Pearson's commitment to education and skills development in India. Theinvestment in TutorVista gives them control of the world's largest online tutoring business and,crucially, a solid platform on which they can build a leading presence in the Indian private schools

sector. Pearson, the world's leading Education Company can make things happen even faster and helpmillions of students achieve their educational goals. TutorVista.com is already the largest consumeronline tutoring company and with the help of Pearson they will now have an opportunity to take theirhigh quality tutoring to schools and colleges directly.

The Indian firm will now retail the broad range of Pearson products across the country. Pearsonexpects the acquisition to enhance its earnings per share and return on invested capital in 2012. ForTutorVista, the deal is being seen as a windfall by analysts who reckon the company had revenue ofaround Rs 50 crore with the real value coming from its online tutoring model that is a unique conceptpioneered by TutorVista.

Pearson India is strong in higher education but needs to develop its presence in the K12 market. WithEducomp, Everonn and others having clear lead in terms of presence inside K12 classrooms in Indianschools, Pearson and Tutor Vista have capabilities of complementing each other to target this market.

Post-acquisition:K.Ganesh and co-founder Meena Ganesh will retain two seats on the TutorVista board that willinclude three directors from Pearson.

The deal also provides complete exits to the other equity investors in the firm apart from Sequoia.Firms such as Lightspeed Ventures, Silicon Valley Bank and education major Manipal Group whotogether contributed to the total funding of $33 million raised by the firm over the last five years areexiting from the company.

The founders of the company are still not exiting as they term this acquisition as monetizing of aportion of the holding in the company as it plans to increase its revenue from $213m to $1 billion inthe coming three years. They will even continue to be an independent company with boardrepresentation and substantial minority as they are still the founder and hold a good stake in theorganization. They have planned to exit the organization after its revenue crosses $ 1billion mark.

The Tutor Vista acquisition follows recent investments in China, Brazil, southern Africa and Nigeria.

The investment in Tutor Vista gives them control over the world's largest online tutoring business.

Written by -

Suyash Kejriwal


Pearson buys 76% inTutor Vista

Date:January 18 ,2011

Acquirer:Pearson

Acquiree:Tutorvista

Deal Value:577 Crore

Deal Nature:Acquisition

Purpose:To build a leadingpresence in the Indianprivate school sector.

th

5


8/17

The most remarkable acquisition which boosted the India's club of $1 billion plus

information technology and gave India's IT enabled service companies a new member is

iGATE $1.2 billion acquisition of PATNI computer systems. iGATE less than half of PATNI's size

has offered to pay 503.5 per share to buy a 63%stake in Patni, backed by equity from private

equity and loans from foreign lenders. This acquisition came up with a big hit which marked

the beginning of Indian business for the year 2011.

iGATE Corporation is an American information technology company founded and based in

Fremont, California with an operational headquarters Pittsburgh, Pennsylvania. The

company specializes in business data processing and uses a structure known as iTOPS

(integrated Technology and Operations Systems) to meet customer demands. Services

provided include: IT consulting; application development, data warehousing, business

intelligence solutions, ERP/enterprise solutions, BPO/business service provisioning,

infrastructure management, testing/independent verification and validation, and contact

centre services. Offices are located in 16 countries and serve businesses in various fields.

While the US has long been their operations centre, the company is undergoing anaggressive expansion into India. By 2012, the company wants to be a billion dollar

organization, for which association should be with 100 of the global 1000 clients.

Behind this huge merger lies the hand of a great personality PHANESH MURTHY,

This great personality helped Infosys Technologies grow from $2 million in 1992 to nearly

$700 million over 10 years. After that he joined Quintant which later got acquired by iGate.

MURTHY, an engineering graduate from IIT Madras and an IIM Ahmedabad alumni spent

months attempting to build out a master strategy to acquire something for whom the most

aggressive bidders included Japanese IT giant NTT and private equity firms ADVENT and

CARLYLE over the last three years.

It was basically a win win deal for both the parties. Patni is expecting that iGate will

strengthen its banking and financial vertical because of this merger. Traditionally it focussed

on insurance, retail and distribution segments.

Because of the expert management team on both the sides, both the companies expected

that this merger will turn out to be the best but however the reality turned out to be

different. We cannot deny the immense effort done by Phanesh Murthy to acquire a

company which is bigger than three times its company size. Where Patni had three brothers

to hold it, iGate had only Phanesh to carry it on.

Immediately after this merger the share price started falling, they could not win the trust of

the public.the reason behind this was people lost hope that iGate will not be able to pay off

the huge debt that it have taken from ROYAL BANK for funding this merger.iGATE went on to acquire a company which is bigger than itself which is just like having a meal

which is much more than your appetite!!

Patni Computer Systems (P) Ltd is India's sixth largest software company that provides

Information technology Service to clients in diverse industries. Established in the year 1978,

Patni Computers has revenue of more than US $ 150 million. Patni has noteworthy technical

expertise in the fields of enterprise applications, enterprise systems management, e-

business and embedded technology.

Written by -

Sangamitra Gosh


Having a meal whichover fills your APPETITE!!!

t o a c q u i r e

6


9/17

Written by -

Smrata Singh


M&A increased3 fold from

April to December2010The first nine months of 2010-11 (AprilDecember) have witnessed more than

three-fold increase in value terms in the Merger & Acquisitions (M&A) growing

from US$ 13.54 billion in the corresponding period to US$ 58.73 billion.

The study undertaken by the Associated Chambers of Commerce and Industry

of India (ASSOCHAM) says the number of deals also rose to 222 from 129during the same period.

The major mergers and acquisitions occurred in the telecom industry followed

by energy, metal & mining, pharmaceutical and BFSI sectors. During the first

nine months of FY'11, telecom sector topped the list with 28.26 per cent share

of the total valuation of M&A deals that took place in India, followed by energy

sector which accounted for 23.59 per cent, metal & mining sector accounting

for 23.19 per cent while pharmaceutical and BFSI sector accounted for 8.20

per cent and 5.74 per cent respectively.

The number of M&A activities in the past nine months shows that the Indian

telecom sector is all set to take on the global markets. There were 10 inbound,

outbound and domestic M&A deals which took place in telecom sector during

April-December 2010, valuing to USD 16.60 billion; representing 28.26 per cent

share in total valuation of the M&A deals that occurred during the period.

Other sectors like IT/ITES. Auto/Auto components, hospitality, steel, consumer

durable, real estate, media & entertainment, logistics, consumer non durable

and healthcare witnessed 146 M&A deals for an amount totaling to USD 6.48

billion, contributing only 11.04 per cent share in total M&A deals.The cross border Inbound, Outbound and domestic M&A deals occupied a

16.63 per cent, 41.96 per cent and 41.41 per cent share of the total deals with

21, 98 and 103 number of deals respectively, during the period April-December

2010.

Bankers expect 2011 to be another bumper year.

"The availability of assets that synergize with Indian businesses with access tofinancing and Indian corporates desire to grow across other emerging marketsare positive drivers," said Ravi Kapoor, head of global banking for Citigroup inIndia.

7


10/17

Written by -

Minu Jha


MERCK endsreserach pactswith RANBAXY

US drug maker MERCK & CO. has terminated its two year old alliance with Ranbaxy

to develop anti-infective medicines, which could have fetched the Indian firms

$100 million over a period of 5 years. Both Ranbaxy and MSD pharmaceuticals,

Indian affiliate of US based MERCK & CO confirmed the development, but refused

to give the details or reasons for ending the pact. The deal was closed after the

Gurgaon based company transferred its new drug research programme to

Japanese parent Daiichi Sankyo, which owns 64% in Ranbaxy. But Ranbaxy has

retained similar research collaboration with British drug maker GlaxoSmithKline to

develop drugs across anti-infective &metabolic, respiratory and oncology

products. It has also not transferred one of its in-house developed anti-malarial

molecule that is now in the final stages of human clinical trials to Daiichi Sankyo.

WHAT WAS THE PACT ALL ABOUT?Ranbaxy and Merck signed a drug discovery and clinical development

collaborations for new products, in the anti-infective field. Under the

collaboration, Ranbaxy and Merck will work together to develop clinically

validated anti-bacterial and anti fungal drug candidates. Ranbaxy will carry out

drug discovery and clinical development through phase 2 which is a clinical trial,

while Merck will be conducting the development & commercialization of drug

candidates thereafter.

Under the terms of the agreement, Ranbaxy will be paid an undisclosed upfront

sum, with the potential to receive payments totalling more than $100 million

associated with the achievement of various research, development & regulatory

approval milestones for each target included in the collaboration.

Ranbaxy is also eligible to receive significant royalties on worldwide net sales of

any products commercialized under the agreement. The agreement provided that

the collaboration will begin & can be extended after the initial term of 5 years,

mutually thereafter by the parties.

8


11/17

Written by -

Prachi Bhatnagar


ONE BUDGE MUCHINTELLECTUAL SUBTERFUGE...

9

Mahindra seems to have taken one of their biggest steps in building themselves as a

global brand. They have acquired a 70% controlling stake in SsangYong, the South

Korean auto maker for US $ 463 million. "Korea is one of the world's leading centres of

automotive excellence and SsangYong brings with it a rich legacy of R&D andinnovation," said Mahindra Group vice chairman and managing director Anand

Mahindra.

In India, M&M is the leader in the utility vehicle segment with a market share of around

60 per cent. However, abroad, its presence in the very same segment is not too visible.

Without a manufacturing base abroad, it has to depend on exports. SsangYong, on the

other hand, sells its SUVs through more than 1,300 dealers outside South Korea.

Mahindra has been performing tremendously well over the last couple of quarters

which has increased its liquid assets massively. Therefore it would easily fund the

acquisition with its internal accruals.

In India, M&M is the leader in the utility vehicle segment with a market share of around

60 per cent. However, abroad, its presence in the very same segment is not too visible.

Without a manufacturing base abroad, it has to depend on exports. SsangYong, on the

other hand, sells its SUVs through more than 1,300 dealers outside South Korea.

Established in 1962, SsangYong has earned for itself quite a good reputation in Europe,

Russia, South America, the Middle East, Africa and Asia as well. SsangYong Motor

Company was a division of the SsangYong Group, a multibillion dollar conglomerate in

South Korea. The group was broken apart because of the problems during the South

East Asian Crisis of 1997. SsangYong Motor Company initially became a part of Daewoo

in 1998 and is now controlled by the Shanghai Automotive Industry Corporation (SAIC).

The group's product portfolio comprises of a luxury sedan, four sport utility vehicles and

a multipurpose vehicle. It also produces Rexton and Kyron SUVs and has far-reaching

exports to Russia, Europe, China, and the Middle East. SsangYong has a strong domestic

network of over 130 dealers and exports to over 90 countries.

The Korean SsangYong has 7 models under 5 brands in its name. As everybody thinks,

SsangYong is not really an ailing auto maker filled with gloom. Its line-up includes 2

large-sized sedans, 4 SUVs and 1 MPV. That's not all. It also possesses the asset of a

gasoline and diesel engine and axle manufacturing plant. SsangYong has achieved quite

a lot in the Korean SUV segment and has hit the record of hitting sales numbers of 1.3

million SUVs from 1990 to 2009.Mahindra will market 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 the

ailing SYMC.

To prevent the replicable situation the labour union of SYMC, M&M and SYMC have also

signed a tripartite agreement with provisions for employment protection, long-term

investment and a commitment for no labour disputes.

There are a few very strong aspects in the combined portfolio of products of the two

auto makers that provide an opportunity to create distinct positioning. Whatever is the

result but this stride of M&M has discernible the beginning for fresh expansion margins

bringing many innovative and new products for the aficionado of the brand.


12/17

Written by -

Karthik Gopu


Reliance Broadcastto buyHindi music channelAnil Ambani-promoted Reliance Broadcast Network (RBNL) plans to acquire

Imagine Showbiz, a Bollywood music and entertainment channel from

Cinestar Advertising Pvt Ltd.

This will mark its entry in Hindi content space, after its tie-up with CBS for three

English channels. The company did not disclose the financial details of the

deal. The acquisition will be done through RBNL's wholly owned subsidiary

Reliance Television Pvt Ltd. The buyout will also include Intellectual Property

rights, music library, Bollywood content, studios, equipment and distribution

network.

Imagine Showbiz was launched by NDTV in 2008 along with their general

entertainment channel Imagine. NDTV later sold its interest in both the

channels to Turner International. Showbiz was a joint venture 51 per cent

held by Turner and the rest by Cinestar Advertising, owned by Mr. Abhimanyu

Singh.

Turner recently sold its stake to Cinestar making it the owner of the company.

This proposed acquisition is in line with the overall strategy to create

ownership of multi-media consumer touch-points. It will further strengthen

RBNL's television portfolio, from the English space into the Hindi

entertainment space.

The company can synergise this platform for cross-selling advertisements, use

common content sourcing, create package deals for ad buyers, and use the

existing distribution network, by leveraging it with its radio arm 92.7 BIG FM

, its intellectual property arm BIG Live and its integrated sales offering

through BIG Connect.

The company is confident of building the channel into a robust entertainment

option with novel programming enhancements, while offering an excitingplatform for marketers, said Mr Katial.

The music space, which is pegged around at Rs 300 crore, is getting crowded.

According to an industry official, music channels here do not have enough of

their own IPs that would safeguard their valuations. The challenge will be to

turnaround Showbiz amid the clutter.

The others in the genre, MTV India and Channel [V] have repositioned

themselves as youth channels and have been experimenting to strike the

balance between music and non-music content as they strive to increase theirrevenues.

10


13/17

Written by -

Subhajit Ghoshal


Bringing the World to India :Acquisition of Hungryzoneby Just EatJust-Eat, an online ordering service based in UK recently acquired the controlling stakes in

Achindra Online Marketing Private Ltd, which is a Bangalore based online food delivery

platform, this acquisition amounts to Rs.46 crores. Just-Eat is the only global player in this

arena and Hungryzone's acquisition will further strengthen its position as an

international player.

Ritesh Dwivedy, founder and CEO, Hungry Zone, has said, Just-Eat is the leading global

player in online food ordering, so the combination of Just-Eat's best practices with our

strong local knowledge and technical prowess derived from four years of operations in

India will drive growth for many years to come. Our proven business model and 200,000

loyal customers will only grow with our new partners thereby helping us expand ourf o o t p r i n t i n o t h e r m a j o r c i t i e s .

Klaus Randel Nyengaard, Group CEO, Just-Eat, has said, The acquisition of a controlling

interest in Hungry Zone marks the first step of Just-Eat's expansion into Asia. The synergy

between the two companies is compelling and we are very excited to be working with

such a strong local team. India has an exotic and rich culinary heritage, thereby catering

to the variant foodies requires an innovative company like Hungry Zone to understand

their preferences and I am very impressed with their results to date.

Just-Eat will invest $ 5-10 million into Hungryzone.com. The first step has been

completed and Just-Eat will gradually increase its investment in Hungryzone over the

next 3 years. A brand makeover and a change in logo are also expected to follow. This

acquisition will help Hungryzone with technology and strategic advice from Just-Eat.

The competitors Takeaway.com and Seamlessweb.com are still struggling in the local

markets of UK and US respectively. Just-Eat currently operates in UK, Denmark, Sweden,th

Belgium, Spain, Netherlands, Ireland, Norway and Canada. India would be the 10

country in the list.

Hungryzone offers listing of 10,000 restaurants over 10 cities but online ordering is

currently available only in Bangalore. It has operations in Bhopal, Kolkata, Chandigarh,

Delhi, Goa, Indore, Hyderabad, Jaipur and Mumbai. HungryZone competes with InfoEdge funded Zomato, as well as Network18's Burrp.com and Indiatimes' TimesCity.com.

Both the companies will be benefitted by this acquisition. Hungryzone would scale-up

and will probably reach all the metros very soon. On the other hand the acquisition is the

first step of Just-Eats' expansion into Asia. Hungryzone has a strong knowledge of the

various culinary tastes of the Indian customers. This when added to the technical

prowess from Just-Eat will further enhance the operations of Hungryzone and facilitate

growth.

This is the first of its kind deal where European e-commerce has invested in the India.

So to sum it all up I am pretty sure that this will turn out to be a tasty deal!!

A C Q U I R E D

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15/17


16/17

Created by -

Aarthi K. &Neha Singh

Its time to

and not fingers...

cross your words

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Top to Bottom1. Exchange rate of shares of the companies that would undergo a merger.4. London listed mining group VEDANTA RESOURCE acquired stake in this company.6. Which UK based company acquired 60% stake in the Bangalore based Hungry Zone?7. It is a would-be acquirer's offer to buy stock directly from shareholders.

Across2. Mahindra acquired 70% stake in which South Korean Company at USD463 million?3. Acquisition that result in below average results.6. Which company acquired Piramal Healthcare Solution at USD3.72 billion?8. Airtel acquired ____________ in Africa at about US $107 billion to become the thirdtelecom

major in the world.9. Which unlisted Healthcare company acquired Hongkong's Quality Healthcare Asia Ltd.?10. Tata Chemicals bought _____________ a UK based white salt producing company forabout US $13 billion.


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