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    The document discusses the merger between Kingfisher Airlines and Deccan Aviation in 2007. It provides background on the growth of the Indian aviation industry after liberalization in the 1990s. The need for consolidation due to increasing costs and competition from low-cost carriers is discussed. Benefits of the merger included increased routes, cash infusion, and synergies. However, differences in company cultures and a rise in fares were potential downsides. The aftermath section examines post-merger issues and the current struggling state of the aviation industry.

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    About Kind Fisher

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    The document discusses the merger between Kingfisher Airlines and Deccan Aviation in 2007. It provides background on the growth of the Indian aviation industry after liberalization in the 1990s. The need for consolidation due to increasing costs and competition from low-cost carriers is discussed. Benefits of the merger included increased routes, cash infusion, and synergies. However, differences in company cultures and a rise in fares were potential downsides. The aftermath section examines post-merger issues and the current struggling state of the aviation industry.

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    3 views34 pages

    Marriage Of:, Presented by

    Uploaded by

    vishnuverma
    The document discusses the merger between Kingfisher Airlines and Deccan Aviation in 2007. It provides background on the growth of the Indian aviation industry after liberalization in the 1990s. The need for consolidation due to increasing costs and competition from low-cost carriers is discussed. Benefits of the merger included increased routes, cash infusion, and synergies. However, differences in company cultures and a rise in fares were potential downsides. The aftermath section examines post-merger issues and the current struggling state of the aviation industry.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 34

    Mergers &

    Acquisitions
    Marriage of

    Presented by ,
    Rohit Mundhara P - 21
    Mayuresh Bhagwate C - 05
    BijalShah C - 32
    Aditi Sabaria C - 31
    Supriya Joshi P - 13
    Paritosh Gupte P - 10
    Monopoly of PSU’s
    Scenario after 1990
    • New Industrial Policy
    •
    • Air Corporation Act 1

    • Post liberalization per


    Entry
    Of
    Private
    Players
    Low Cost carriers
    Consolidation

    The Need Of The


    • Origin- Deccan Aviation Ltd.

    • Growing demand of Air

    connectivity

    • Identifying potential Consumer


    Towards making Air travel
    more Comfortable

    • E-ticketing
    • Cut on the Complementary service

    - food to passengers

    - no meals or company vehicles

    - no separate staff

    - route planning

    - outsourcing of ground operations
    Generation of
    Additional Revenue

    • Sale of food inside the aircr


    • Selling Advertisement
    • Differential ticket pricing
    • Non refundable tickets
    • No bulk discounts
    • Paid initial training to staff
    Dr Vijay Mallya identified the gap
    Launched in 2005 by United Breweries
    Group
    Ready for take off with 4 flights a
    day and a fleet of one Airbus320
    Ushered a new era of luxury
    • Carved a niche for itself in a short span of time
    • Only airline offering premium 1rst class service
    on domestic routes
    • Modelled on the lines of US carrier Jet Blue
    • Great in-flight experience

    - Personal valet assistance in luggage
    handling at airport

    - Personalised in-flight entertainment
    system

    - Fashion models as flight attendants

    Clash of The Titans

    MARS
    v/s
    VENUS
    Motivation
    for
    Merger
    • Ever Increasing • Increasing costs
    Cost • Difficulty in
    • Compromise on maintaining
    quality hits the brand image
    brand • Competition from
    • Unviable pricing low-cost airlines
    Possible gains

    • Cash crunch • Routes network


    • Leveraging • License to fly
    management internationally
    and HR
    Possible gains

    • Economies of size
    • Rationalization of Personnel
    • Increase in Customer base
    Possible losses

    • Fundamentally opposite models


    • Impact on masses -

    -Fear of rise in fare prices

    -Ignorance of target audience
    • Loss of individuality
    Final Merger Deal
    LOSSES YEAR ENDED

    Kingfisher Rs.577crs 31st


    Airlines March,2007
    Deccan Aviation Rs.418crs 30th June,2007
    DEAL
    STRUCTURE

     1st Phase:
    - UB bought 26% stake at Rs.155
    p.s. on 9th July,2007
    - Paid Rs.550crores
    -

    • 2nd Phase:
    Changes in Stock Prices
    COST BENEFIT ANALYSIS
    • Cash Paid = Rs.550Crs + 418Crs = Rs.968Crs
    • Present Value of 46%stake = 62316254.28*137.5
    = 856.85Crs
    • Cost for kingfisher = Cash Paid-Present Value
     = 968-856.85
     =Rs.111.15Crs.
    SYNERGIES

    • Operational Synergy in the form of cost


    cutting(upto Rs.300crs.)
    • Increasing market share(32-34%)
    • Have both direct and indirect connectivity
    to the US, Europe and different Asian
    SYNERGIES

    • Received in writing slots to operate flights in


    San Francisco, JFK (New York) and
    Heathrow (London)
    • These destinations will be connected non-stop
    from Bangalore, unique routes from India
    The Aftermath – Post
    DifferentMerger
    Cultures Issues

    Expected Job Cuts

    Different Leadership Styles


    contd...
    Expected Industry impact

    Further consolidation

    Rise in fares

    Greater shareholder value


    Current
    Scenario
    et Share

    isher airlines – Jet airways :- Strategic Alliance

    roup ready to Divest

    ’s & Rights Issue


    Current
    Scenario

    s in AirCrafts deliveries &Cancellation of Orders

    try Making Losses-Oil Concerns

    structure
    Conclusion

    The Industry has Witnessed tremendous

    growth in the Past Decader Leading to intense

    Competition in the Industry & Setting the

    Stage for Consolidation


    • Webliography –
     www.flykingfisher.com
     www.yahoofinance.com
     www.google.com
     www.bseindia.com
     www.businessworld.in

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