Mergers & Acquisition

CIA - 1
Submitted To: Prof: Anirban Ghatak Submitted By: Vinay Jain Reg No: 1121008

BACKGROUND

PRE- ACQUISITION SHAREHOLDING PATTERN OF ZANDU PHARMA.

Zandu Pharma

Emami (3.9%)

Parikhs (33%)

Vaidyas (23.62%)

Others Shareholders (39.48%)

Emami holding 3.9% equity stake in Zandu which was acquired through open market purchases has entered into share purchase agreements with Devkumar Vaidya and family ( the co-promoters of Zandu Pharmaceutica Works Ltd) in May 2008 to acquire 23.62% stake in Zandu Pharma.
THE CONCEPT USED

Emami Ltd, which has acquired 27.5% of Zandu Pharmaceutical Works Ltd Emami made an open offer for 20% more of Zandus shares, which raised its stake to 47.5%. (Companies acquiring a stake of 15% or more must make an offer to buy another 20% in the target firm.)

FUNDING

The acquisition was funded by a judicious mix of debt and internal resources. Thereafter, the mobilisation of QIP (Rs. 310 cr) neutralized a large part of debt. (713 Cr.)

TYPE OF MERGER

Company sought for inorganic growth strategy for Market and Product Extension Merger through this merger. Market extension through enhanced distribution channel of Zandu. Product extension by leveraging on more than 100 year product portfolio of Zandu.

PRIMARY AND SECONDARY OBJECTIVE OF MERGER PRIMARY:

Emami running on aggressive growth enjoys strong brand equity, wide distribution channel and R&D Focus. Zandu The combination of Zandu with Emami will help grow the trusted Zandu brands aggressively, extending synergic benefits to Emami as well.
SECONDARY:

Common real estate interests of Emami and Zandu, which, if given focused attention, can develop into significant revenue-generating segment. As an ultimate choice, Emami, absorbed FMCG business of Zandu with itself and hived off the real estate business into Emami Infrastructure.