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How Emerging Giants Are Rewriting the Rules of M&A (15 min) - Coggle…
How Emerging Giants Are Rewriting the Rules of M&A
(15 min)
Background
(4 min)
M&A Background
in an ironic twist, companies from developing countries such as China, India, Malaysia, Russia, and South Africa are us- ing M&A as their main globalization strategy today
50% of mergers don’t achieve their business objectives
Introduction of Hindalco
Hindalco’s Global Ambitions
Basic information
Why Hindalco want to do M&A
obtain competencies, technology, and knowledge essential to their strategy
Unlike Western companies, which use M&A primarily to increase size and efficiency,
emerging giants acquire firms to obtain competencies, technology, and knowledge essential to their strategy. They avoid overturning acquisitions’ management structures and people, ensur- ing smoother integration. And they have a clear long-term vision guiding their actions; they are willing to wait for a takeover to pay off.
Outcome
By applying these M&A prin- ciples, Indian aluminum pro- ducer Hindalco became one of the world’s largest aluminum manufacturers.
Market integration
Despite the com- petition in the Indian market, Hindalco can easily stoke demand in India for the products of companies it acquires. This type of integration is peculiar to emerg- ing giants, which have fast-growing home markets.
The M&A Competency Stairway
(5-6min)
Why Hindalco need to use this strategic
Introduction of M&A Competency Stairway
What's the benifit / outcome of the strategic
Comparison of Traditional & Emerging Giants Approach on M&A
(5-6min)
Introduction of the comparison
How Hindalco deal with the M&A
Financial integration
Organizational integration
Business process integration
Problem & Consideration
not been able to commercialize Novelis’s technologies quickly
Hindalco took over Novelis when the stock market was at its peak
if the logic driving an acquisition is flawed, it will be too late before the company realizes its mistake. Companies like Hindalco can conceal a multitude of sins by telling investors,
“We know best; trust us.”
Conclusion
