1. Merger & Acquisition
(Hindalco & Novelis)

2. Vaibhav L.
Shilpa D.
Alok M.

3. The combining of two or more
companies, generally by offering the
stockholders of one company securities
in the acquiring company in exchange
for the surrender of their stock.
When one company takes over
another and clearly established itself
as the new owner, the purchase is
called an acquisition.

4. INTRODUCTION
To
Company

7. STRENGTH
• Global brand image.
• Cost effective producer.
• Sound financial position.
• A high degree quality consciousness is the core competence of the
company, ISO 9001 and ISO 14001 have added more prestige to the
company.
• Company has a well-established distribution network, covering a
geographically wide and scattered market.
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8. WEAKNESS
• Present production capacity is not adequate to meet the
rising high demand.
• Technology is not upgraded to mark as compare to global
giants in aluminium industry.
OPPORTUNITY
•R & D collabratation with universities and another research
organization.
•More emphasis on downstream production of value added
products.
•Recycling should be adopted as routine production.
•Raising more finance from marketing for more acquisition
and merger.
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9. THREATS
• Innovative revolution in plastic and steel industry.
• Reduce in Exide duty.
• Fall in price of Al. In neighbour country.
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10. It was born in early 2005. The $ 23.6-billion
aluminium giant and Canada-based.
The company is No. 1 rolled products producer in
Europe, South America and Asia, and the No. 2
producer in North America.
Novelis is the world leader in aluminium rolling,
producing an estimated 19 percent of the world's
flat-rolled aluminium products.

11. Objectives of Acquisition
• Higher profitability
• To gain access to global aluminium market and expand production
capacity to keep pace with growing demand for aluminium.
• This merger of Novelis into Hindalco will establish a global integrated
aluminium producer with low-cost alumina.
• Aluminium production facilities combined with high-end aluminium rolled
product capabilities.
• After merger Hindalco will emerge as the biggest rolled aluminium
products maker.

12. Objectives of Acquisition
• fifth -largest integrated aluminium manufacturer in the world.
• Hindalco's position as one of the lowest cost producers of primary
aluminium in the world is leverage able into becoming a globally strong
player.
• The Novelis acquisition will give the company immediate scale and
strong a global footprint.
• Cost of Acquisition lower than setting up a green field plant and
marketing and distribution channel.

14. Indian Deal makers
• Team Members
Kumar Mangalam Birla
Debu Bhattacharya, Managing Director, Hindalco
Sumant Sinha, Group CFO
• Announced on Feb, 11, 2007
• Negotiation went for 18 months.
• Approval of at least two thirds shareholders.

15. • Hindalco share plunged 13.74 per cent.
• All-cash transaction
• Aluminium producer with low-cost alumina.
• Fifth -largest integrated aluminium manufacturer in the world.

16. Deal structure
Divided into 2 parts-
1)100% of Novelis equity @44.93$ per
share which add up to $3.6b
2)$2.4b debt on Novelis balance sheet
- No Option of Leverage buyout unlike
TATA Corus

17. Conclusion
'We look upon the Aluminium business as a core
business that has enormous growth potential in
revenues and earnings,’
'Our vision is to be a premium metals major, global in
size and reach .... The acquisition of Novelis is a step in
this direction'
Mr. Kumar Mangalam Birla,
Chairman,
Hindalco Industries.
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