1. M&A : Background & Scenario In 1990, only six developing and transition countries had made any outward investment. In 2005, the number increased to 25. Between 1987 and 2005, the share of global M&As by MNCs from developing and transition countries rose from 4% to 13% in value terms, and their share in greenfield and expansion projects exceeded 15 percent in 2005.

2. A survey shows that 81% of the companies have considered M&As and 30% have actually done a transaction in the past 3 years. Over 70% say that they expect to do a deal in the next 3 years. All this denotes that we are set for an M&A boom in the years to come. Global M&A volumes of $10bn a day, India’s $18bn for the year 2005 indicates that there is still a long way to go. The trend is clearly on the way up. M&A in 2006-07 - $ 3.6 Trillion M&A in 2005-06 - $ 3.55 Trillion (data by Bloomberg) October 2006 M&A deals - $ 262 Billion The Asian M&A market saw 5792 deals worth $ 255.07 billion China alone was the largest market with 1862 deals worth $54.76 billion M&A : Background & Scenario …...Contd.

3. Corporate India has gone on an acquisition spree, powered by the urge to go global, strong market fundamentals and the drive to dish out cost- competitive products. Acquisitions were not limited to the domestic market, but spread out in the global arena also. Though India's public sector took the lead in investing abroad, especially looking for oil assets, the private sector is now going full speed ahead, driving overseas investments e.g. Arcelor acquired by Mr. Lakshmi Mittal. Mahindra & Mahindra's takeover of 90 percent stake in Schoneweiss, a family-owned German company. Tata's takeover of Corus & Tetley Tea Co. Hutchison Whampoa of Hong Kong sold their controlling stake in Hutchison - Essar to Vodafone for a whopping $11.1 billion. Indian Scenario - Major Deals

4. Swiss cement major, Holcim, which acquired a 67 per cent stake in Ambuja Cement India Ltd (ACIL). Videocon Group's acquisition of Thomson's colour picture tube business in China, Poland, Mexico, and Italy for a total of $290 million. The other large overseas deal was by pharmaceuticals Matrix Laboratories, which acquired 100 per cent of the Belgian Pharma Co., Docpharma for $263 million). Birla-Hindalco Indian business conglomerate Aditya Birla group-owned flagship company Hindalco Industries Ltd. Took over Atlanta-based aluminum giant Novelis Inc. for US$ 6.4 billion Indian Scenario - Major Deals ……. Contd.- Indian firms concluded 70 M&A deals between April and September, spending $14 billion and would have saved as much as Rs.6500 crore ($1.66 billion) because of the over 10% rupee appreciation against the greenback, an Assocham Eco Pulse study said.

6. Why M & A ? Quicker way to growth. Accessing new markets. Taking on the global competition. Improving operating margins and efficiencies, and Acquiring visibility and international brands. Buying cutting-edge technology rather than importing it Developing new product mixes Objective behind M&A TransactionResponses (in%) To improve revenues & profitability33% Faster growth in scale quicker time to market28% Acquisition of new technology or competence22% To eliminate competition & increase market share11% Tax shields & investment savings3% Any other reason3%

7. Corporate Governance  Tata could acquire so many units outside India, against stiff competition; due to good corporate governance & strategic fit.  Corporate governance is essential to acquire a company and then make the acquisition successful. In absence of good governance, acquisition may fizzle out.

8. Interplay of following factors : Strategy Planning Personnel Legal Finance People Media Management Philosophy – Corporate Governance

9. M&A as a Business Strategy Analysis Only 19% of the respondents state that they do not believe in M&A and 81% look at it as a part of strategy or will look at it opportunistically. Conclusion - M&A is definitely a key agenda for India Inc M&A as a part of Business Strategy

10. Enhancing Valuation Analysis -The key drivers for valuation according to India Inc are Management quality, Industry factors and Financial performance. Conclusion -The perceived quality of a management team a key driver. To enhance valuation along with transparency. Interestingly Press interaction is seen as another way to enhance valuation. Key Drivers for enhancing valuation of a company

12. Success Factors Analysis The main factors for succeeding in M&A are Strategic Fit, Personnel & Proper Planning. Conclusion For success in M&A it is critical that there be a good strategic fit and personnel or HR is a key factor apart from planning. India Inc is not looking at M&A to become conglomerate and core competence is a key driver for growth through M&A Most important factors that contribute to the success of a M&A Transaction.

13. M & A’s – Future economic outlook for India Foreign Direct Investment by Indian Companies is all set to increase by 15 per cent per annum over the next five years. The report forecasts continued growth averaging 15 per cent over the next five years adding that this year will see growth of 19 per cent on activity on 2006. North America, in particular, is expected to emerge as a 'hot spot' for Indian outward investment, with levels of activity trebling over the next five years, it says. Indian Companies Set to go global : Study

14. M&A’s – Future economic outlook for India… "Although discussion about India today tends to focus on the growing tide of foreign companies looking to establish operations in the country through direct investment, joint ventures or through outsourcing, today's Indian companies have a global vision and are becoming an increasingly important source of outbound investment," Michel Lemagnen, Director, Oxford Intelligence research. The removal in 2005 of key restrictions on Indian companies' ability to expand internationally triggered a sharp increase in overseas expansion. The country's top companies are now in an extremely healthy position in terms of cash, profitability and financing capacity and their potential for international investment, through both M&As and FDI, for the next few years is extremely favourable".

15. M&A in Future Analysis Over 70% expect to do a transaction in the next 3-4 years with several of them planning to do multiple transactions. Conclusion We can expect greater activity in M&A in the years to come. Out of the 73% of the respondents who have said “Yes” 15% of the respondents say that their company plans to make at least 1 acquisition in the next 3 to 4 years. 30% of them say more than 2 acquisitions About 28% of the respondents believe that their company plans to make numerous acquisitions in the next 3 to 4 years Plans to acquire or merge in the next 3 to 4 years.

16. Cross Border M&A in future Analysis A resounding 94% expect to do a cross border acquisition out of those who expect to do a deal in the next 3 years. Plans for Cross Border Acquisitions in the next 3 to 4 years

17. Conclusion MMergers & Acquisitions are a significant form of business strategy today for Corporates. TThe two main objectives behind any M&A Transaction, for corporates today is : to improve Revenues and Profitability Faster growth in scale and quicker access to market Competition in Globalised Market TThe most important factors according to corporate India that contribute to the success of an M&A Transaction are : TTiming  Intrinsic Fit  Personnel  Advisors on legal, policy and financial strategies