Tata Corus acquisitionFrom Wikipedia, the free encyclopediaJump to: navigation, search

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On 20 October 2006 the board of directors of Anglo-Dutch steelmaker Corus accepted a $7.6 billion takeover bid from Tata Steel, the Indian steel company. The following months saw a lot of negotiations from both sides of the deal. Tata Steel's bid to acquire Corus Group was challenged by CSN, the Brazilian steel maker. Finally, on January 30, 2007, Tata Steel purchased a 100% stake in the Corus Group at 608 pence per share in an all cash deal, cumulatively valued at USD 12.04 Billion. The deal is the largest Indian takeover of a foreign company and made Tata Steel the world's fifth-largest steel group.

Contents

 [hide]

1 The involved companies 2 Synergies between the two companies 3 Counter bid by CSN 4 Proposed funding of the deal 5 The deal 6 Timelines

o 6.1 Final deal structure o 6.2 New Board formulation o 6.3 Strategic and Integration Committee

7 See also 8 References 9 External links

[edit] The involved companies

'Tata Steel', formerly known as TISCO (Tata Iron and Steel Company Limited), was the world's 56th largest and India's 2nd largest steel company with an annual crude steel capacity of 3.8 million tonnes. It is based in Jamshedpur, Jharkhand, India.[1][2] It is part of the Tata Group of companies. Post Corus merger, Tata Steel is India's second-largest and second-most profitable company in private sector with consolidated revenues of Rs 1,32,110 crore and net profit of over Rs 12,350 crore during the year ended March 31, 2008.[3][4]. The company was also recognized as the world's best steel producer by World Steel Dynamics in 2005. The company is listed on BSE and NSE; and employs about 82,700 people (as of 2007).

Corus was formed from the merger of Koninklijke Hoogovens N.V. with British Steel Plc on 6 October 1999. It has major integrated steel plants at Port Talbot, South Wales; Scunthorpe, North Lincolnshire; Teesside, Cleveland (all in the United Kingdom) and IJmuiden in the Netherlands. It also has rolling mills situated at Shotton, North Wales (which manufactures Colorcoat products), Trostre in Llanelli, Llanwern in Newport, South Wales, Rotherham and Stocksbridge, South Yorkshire, England, Motherwell, North Lanarkshire, Scotland, Hayange, France, and Bergen, Norway. In addition it has tube mills located at Corby, Stockton and Hartlepool in England and Oosterhout, Arnhem, Zwijndrecht and Maastricht in the Netherlands. Group turnover for the year to 31 December 2005 was £10.142 billion. Profits were £580 million before tax and £451 million after tax.

[edit] Synergies between the two companies

There were a lot of apparent synergies between Tata Steel which was a low cost steel producer in fast developing region of the world and Corus which was a high value product manufacturer in the region of the world demanding value products. Some of the prominent synergies that could arise from the deal were as follows :

Tata was one of the lowest cost steel producers in the world and had self sufficiency in raw material. Corus was fighting to keep its productions costs under control and was on the look out for sources of iron ore.

Tata had a strong retail and distribution network in India and SE Asia. This would give the European manufacturer a in-road into the emerging Asian markets. Tata was a major supplier to the Indian auto industry and the demand for value added steel products was growing in this market. Hence there would be a powerful combination of high quality developed and low cost high growth markets

There would be technology transfer and cross-fertilization of R&D capabilities between the two companies that specialized in different areas of the value chain

There was a strong culture fit between the two organizations both of which highly emphasized on continuous improvement and ethics. Tata steel's Continuous Improvement Program ‘Aspire’with the core values :Trusteeship,integrity,respect for individual, credibility and excellence. Corus's Continuous Improvement Program ‘The Corus Way’ with the core values : code of ethics, integrity, creating value in steel, customer focus, selective growth and respect for our people.

[edit] Counter bid by CSN

In November 2006,Brazilian steel marker Companhia Siderúrgica Nacional (CSN)challenged Tata Steel's proposal for acquisition. They countered Tata Steel's offer of 455 pence per share by offering 475 pence per share of Corus.

[edit] Proposed funding of the deal

Tata surprised the credit default swap segment of the derivative markets by deciding to raise $6.17bn of debt for the deal through a new subsidiary of Corus called 'Tata Steel UK', rather than by raising the debt itself. Tata's security credit rating is investment grade, whereas the new subsidiary may not be. The higher risk associated with raising debt through a subsidiary with a lower credit rating prompted Fitch Ratings to downgrade its rating of the credit swap risks in the takeover to 'negative'. Fitch also stated that Corus' responsibility for the debt may lead to Corus' own unsecured debt rating being downgraded. This does not affect the rating of bonds issued by Corus which are secured debt.

[edit] The deal

This section requires expansion.

On January 31, 2007, following the lack of agreement on an offer, an auction process was triggered. Following the conclusion of the auction process (at an unprecedented length of nine rounds) conducted by the Panel in accordance with Rule 32.5 of the Code (the "Auction"), Tata Steel announced the proposed acquisition of Corus Group at 608p per share, that being 5p more than CSN's top offer of 603p. The final valuation of Corus was thus put at $12.04 Billion.

[edit] Timelines

On October 20, 2006, Tata Steel announced that it had agreed to pick up a 100% stake in the Anglo-Dutch steel maker Corus at 455 pence per share in an all cash deal, cumulatively valued at GBP 4.3 billion (USD 8.04 billion).

On November 19, 2006, the Brazilian steel company CSN launched a counter offer for Corus at 475 pence per share, valuing it at $8.4 billion.

On December 11, 2006, Tata preemptively upped the offer to 500 pence, which was within hours trumped by CSN's offer of 515 pence per share, valuing the deal at $ 9.6 Billion. The Corus board promptly recommended both the revised offers to its shareholders.

On December 11, 2006, CSN announced a formal offer for the Company at an offer price of 515 pence per Corus Share , valuing the deal at $ 9.6 Billion.. The CSN Acquisition would also be implemented by way of a scheme of arrangement and is subject to a pre-condition that either Corus Shareholders reject the Tata Scheme or the Tata Scheme is otherwise withdrawn by Corus or lapses. The Corus board promptly recommended both the revised offers to its shareholders.

Also on December 19, 2006, UK Watchdog the Panel on Takeovers and Mergers announced that the last date for each of Tata and CSN to announce revised offers for the Company, should they wish to do so, is 30 January 2007. They also warned that it would begin an auction procedure if the two remained in competition.

On January 31, 2007 Tata Steel won their bid for Corus after offering 608 pence per share, valuing Corus at $11.3bn

[edit] Final deal structure

$3.5–3.8bn infusion from Tata Steel ($2bn as its equity contribution, $1.5–1.8bn through a bridge loan)

$5.6bn through a LBO ($3.05bn through senior term loan, $2.6bn through high yield loan)

[edit] New Board formulation

A new board was formulated with representation from both the companies to provide a common platform for strategy and integration.

Mr. R.N. Tata will be the Chairman of Tata Steel and Corus Mr. Jim Leng will be the deputy chairman of Tata Steel and Corus Mr. B Muthuraman, Mr. Ishaat Hussain and Mr. Arun Gandhi to join the Corus board

[edit] Strategic and Integration Committee

A 'Strategic and Integration Committee' was formulated to develop and execute the integration and further growth plans. Appropriate cross functional teams were formed under this committee to look into specific issues.

[edit] See also

Tata Steel Corus Group List of steel producers

[edit] References

1. ̂ Company Profile2. ̂ Tata Steel plans pooling of raw materials- Steel-Ind'l Goods / Svs-News By Industry-News-The

Economic Times3. ̂ Financial Results for the Year ended on 31st March, 20084. ̂ Corus buy hauls Tata Steel next to Reliance

[edit] External links

World Steel Dynamics

Tata Steel

From Wikipedia, the free encyclopedia

Jump to: navigation, search

Tata Steel

Type Public (BSE: 500470)

Industry Steel

Founded 1907

Founder(s) Dorabji Tata and Utsav Maheshwari

Headquarters Mumbai, Maharashtra, India [1]

Area served Worldwide

Key peopleB Muthuraman (Vice Chairman)

HM Nerurkar (MD)

ProductsSteel, flat steel products, long steel

products, wire products, plates

Revenue 118,753 crore (US$22.56 billion) (2011)[2]

Profit 8,983 crore (US$1.71 billion) (2011)[2]

Total assets US$ 24.446 billion (2010)[2]

Employees 81,269 (2011)[3]

Parent Tata Group

Subsidiaries Tata Steel Europe

Website www.tatasteel.com

Tata Steel (BSE: 500470) (formerly TISCO and Tata Iron and Steel Company Limited) is a multinational steel company headquartered in Jamshedpur, India and part of Tata Group. It is the world's seventh-largest steel company, with an annual crude steel capacity of 31 million tonnes, and the largest private-sector steel company in India measured by domestic production.[4] Tata Steel is also India's second largest and second-most profitable private-sector company, with consolidated revenues of 118,753 crore (US$22.56 billion) and net profit of over 8,983 crore (US$1.71 billion) in the year ended March 31, 2011.[5][6] Tata Steel is the eighth most-valuable Indian brand according to an annual survey conducted by Brand Finance and The Economic Times in 2010. [7] It is currently ranked 410th in the Fortune Global 500.[8][9]

Tata Steel's largest plant is located in Jamshedpur, Jharkhand, with its recent acquisitions, the company has become a multinational with operations in various countries. The Jamshedpur plant contains the DCS supplied by Honeywell.The registered office of Tata Steel is in Mumbai. The company was also recognized as the world's best steel producer by World Steel Dynamics in 2005.[10] The company is listed on Bombay Stock Exchange and National Stock Exchange of India, and employs about 82,700 people (as of 2007).[3] In August 2007 Tata Steel won the bid to acquire the UK-based steel maker Corus in what was, to date, the largest international acquisition by an Indian company. It made the Tata Group the world's fifth largest steel maker, and catapulted them to the global league.[11]

Contents

[hide]

1 Capacity Expansion o 1.1 Acquisitions o 1.2 Corus

1.2.1 Other acquisitions 2 Controversies

o 2.1 Dhamra Port 3 References 4 External links

[edit] Capacity Expansion

Tata Steel has set an ambitious target to achieve a capacity of 100 million tonne by 2015. Managing Director B. Muthuraman stated that of the 100 million tonne, Tata Steel is planning a 50-50 balance between Greenfield facilities and acquisitions.[12][13]

Overseas acquisitions have already added up to 21.4 million tonne, which includes Corus production at 18.2 million tonne, Natsteel production at two million tonne and Millennium Steel production at

1.2 million tonne. Tata is looking to add another 29 million tonnes through the acquisition route.[12]

[13]

Tata Steel has lined up a series of greenfield projects in India and outside which includes [12]

1. 6 million tonne plant in Orissa (India)2. 6.8 million tonne in Jharkhand (India)(2.9 million tonne will be added by dec, 2011)3. 5 million tonne in Chhattisgarh (India)4. 3-million tonne plant in Iran5. 2.4-million tonne plant in Bangladesh6. 5 million tonne capacity expansion at Jamshedpur (India)7. 10.5 million tonne plant in Vietnam (feasibility studies underway)

[edit] Acquisitions

[edit] Corus

Main article: Tata Corus acquisition

On 20 October 2006, TISCO signed a deal with Anglo-Dutch company, Corus

On 19 November 2006, the Brazilian steel company Companhia Siderúrgica Nacional (CSN) launched a counter offer for Corus at 475 pence per share, valuing it at £4.5billion.

On 11 December 2006, Tata preemptively upped the offer to 500 pence, which was within hours trumped by CSN's offer of 515 pence per share, valuing the deal at £4.9 billion. The Corus board promptly recommended both the revised offers to its shareholders.

Wikinews has related news: Steel Industry: Tata buys Corus

On 31 January 2007 Tata Steel won their bid for Corus after offering 608 pence per share, valuing Corus at £6.7 billion.

[edit] Other acquisitions

In August 2004, Tata Steel entered into definitive agreements with Singapore based NatSteel Ltd to acquire its steel business for Singapore $486.4 million (approximately Rs 1,313 crore) in an all cash transaction.

In 2005, Tata Steel acquired 40% Stake in Millennium Steel in Thailand for $130 million (approx. Rs 600 crore).

In 2007 Tata Steel through its wholly owned Singapore subsidiary, NatSteel Asia Pte Ltd acquired controlling stake in two rolling mills: SSE Steel Ltd, Vinausteel Ltd located in Vietnam.

[edit] Controversies

The company is facing increasing criticism that the drive for growth and profits is completely overshadowing its once famed philanthropy, and causing lasting social and environmental damage at various locations.[14] In response, Tata cites its programs for environment and resource conservation, including reduction in greenhouse emission, raw materials and water consumption. The company has increased waste re-use and re-cycling, and reclaims land at its captive mines and collieries through forestation. Tata Steel's chief, environment and occupational health, says, "Our capital investment in pollution-abatement solutions was in the vicinity of Rs 400 crore in 2003-04."[15]

[edit] Dhamra Port

The Dhamra Port, a Joint Venture between Larsen & Toubro and Tata Steel, has come in for criticism from groups such as Greenpeace, Wildlife Protection Society of India and the Orissa Traditional Fishworkers' Union. The port is being built within five kilometres of the Bhitarkanika National Park, a Ramsar wetland of international importance, home to an impressive diversity of mangrove species, saltwater crocodiles and an array of avian species. The port will also be approximately 15 km. from the turtle nesting of Gahirmatha Beach, and turtles are also found immediately adjoining the port site. Aside from potential impacts on nesting and feeding grounds of the turtles, the mudflats of the port site itself are breeding grounds for horseshoe crabs as well as rare species of reptiles and amphibians. One such species, the amphibian Fejervarya cancrivora, is the first record for the Indian mainland.[16][17]

[edit] References

Tata Steel EuropeFrom Wikipedia, the free encyclopedia  (Redirected from Corus Group)Jump to: navigation, search

Corus redirects here, for other uses see Corus (disambiguation)

Tata Steel Europe

Type Subsidiary

Industry Steel

Founded

Koninklijke Hoogovens N.V. in 1918

British Steel Corporation in 1967

Corus in 1999

Headquarters London, United Kingdom

Key people

Karl-Ulrich Kohler, MD & CEO

Uday Chaturvedi, CTO

Tor Farquhar, Executive Director Human

Resources

Frank Royle, Director Finance

Products Steel

Parent Tata Steel

Website www.tatasteeleurope.com/en/

Tata Steel Europe (formerly Corus Group) is a multinational steel-making company headquartered in London, United Kingdom.[1][2] It is the second-largest steel-maker in Europe and is a subsidiary of Tata Steel of India, one of the ten largest steel producers in the world.[1]

Corus Group was formed through the merger of Koninklijke Hoogovens and British Steel on 6 October 1999. It was once a constituent of the FTSE 100 Index but was acquired by Tata in 2007. On 27 September 2010 Corus announced it was changing its name to Tata Steel Europe and adopting the Tata corporate identity.

Contents

 [hide]

1 History o 1.1 Background - Corus o 1.2 Takeover by Tata Steel o 1.3 Tata Steel Europe

2 Operations 3 Products

o 3.1 Construction o 3.2 Electrical steels

4 See also 5 References 6 External links

[edit] History

[edit] Background - Corus

See also: British Steel and Koninklijke Hoogovens

British Steel Corporation was a large British steel producer, consisting of the assets of former private companies which had been nationalised on 28 July 1967 by the Labour Party government of Harold Wilson. On 5 December 1998 the company was privatised as a result of the British Steel Act 1988. Koninklijke Hoogovens was a Dutch steel producer founded in 1918, located in IJmuiden.

On 6 October 1999 British Steel merged with Koninklijke Hoogovens to form 'Corus Group' forming the third largest producer of steel behind POSCO of South Korea and Nippon Steel of Japan. British Steel formed about two-thirds of the merged group.

On 16 March 2006, Corus announced that it had signed a letter of intent to sell its aluminium rolled products and extrusions businesses to Aleris International, Inc. for £570m. Corus retained its smelting operations and supply Aleris under a long-term agreement. On 1 August, the sale to Aleris Europe was completed.[3]

[edit] Takeover by Tata Steel

Main article: Tata Corus acquisition

On 30 January 2007, Tata Steel, part of India's Tata Group, purchased a 100% stake in the Corus Group at 608 pence per share in an all cash deal, cumulatively valued at (USD 12.04 Billion).[4]

Tata surprised the credit default swap segment of the derivative markets by deciding to raise $6.17bn of debt for the deal through a new subsidiary of Corus called 'Tata Steel UK', rather than by raising the debt itself. Tata's security credit rating is investment grade, whereas the new subsidiary may not be. The higher risk associated with raising debt through a subsidiary with a lower credit rating prompted Fitch Ratings to downgrade its rating of the credit swap risks in the takeover to 'negative'. Fitch also stated that Corus' responsibility for the debt may lead to Corus' own unsecured debt rating being downgraded. This does not affect the rating of bonds issued by Corus which are secured debt.[5]

On 19 November 2006, the Brazillian steel company CSN launched a counter offer for Corus at 475 pence per share, valuing it at $8.4 Billion.

On 10 December 2006, Tata preemptively upped the offer to 500 pence (the “Revised Tata Acquisition”). Other than the increased offer price, the Revised Tata Acquisition was subject to the same terms and conditions as set out in the original offer.

On 11 December 2006, CSN announced a formal offer for the Company at an offer price of 515 pence per Corus Share (the “CSN Acquisition”), valuing the deal at $ 9.6 Billion.. The CSN Acquisition would also be implemented by way of a scheme of arrangement and is subject to a pre-condition that either Corus Shareholders reject the Tata Scheme or the Tata Scheme is otherwise withdrawn by Corus or lapses. The Corus board promptly recommended both the revised offers to its shareholders.

On 19 December 2006, Corus announced the following:

In the light of the competing offers for Corus by Tata Steel UK Limited (“Tata”) and CSN Acquisitions Limited (“CSN”), the Company announced on 12 December 2006 that the Corus Directors intended to propose resolutions to shareholders at each of the reconvened EGM and Court Meeting to be held on 20 December 2006 to adjourn those meetings. The Company also stated that it would announce a proposed date for those adjourned meetings in due course.

Also on 19 December 2006, UK Watchdog the Panel on Takeovers and Mergers announced that the last date for each of Tata and CSN to announce revised offers for the Company, should they wish to do so, is 30 January 2007. They also warned that it would begin an auction procedure if the two remained in competition.[6]

On 31 January 2007, following the lack of agreement on an offer, the previously mentioned auction process was triggered. Following the conclusion of the auction process (at an unprecedented length of nine rounds) conducted by the Panel in accordance with Rule 32.5

of the Code (the "Auction"), Tata Steel announced the proposed acquisition of Corus Group at 608p per share, that being 5p more than CSN's top offer of 603p. The £6.7 billion deal includes £500 million of debt.

The Corus Group board recommended the acquisition to their shareholders later the same day.

[edit] Tata Steel Europe

On 27 September 2010 Corus announced that it was changing its name to Tata Steel Europe and adopting the Tata logo. The style change started with immediate effect on transactional documents but the complete branding change would take place over an unspecified period.

[edit] Operations

Since 2008, Corus and subsequently Tata Steel Europe has been structured into three divisions. These are:

Strip Products Division Long Products Division - construction, industrial, engineering, rail and tubular products Distribution and Building Systems Division - steel products for the building industry, and

distribution for other products

Following the sale of Teesside Steelworks to SSI in February 2011, Tata now operate three major integrated steel plants:

Port Talbot , South Wales Scunthorpe , North Lincolnshire IJmuiden in the Netherlands

It also has secondary rolling mills and steel product manufacturing sites situated at:

Shotton , North Wales (which manufactures Colorcoat products) Trostre , Llanelli (manufactures Tinplate) Llanwern , Newport Rotherham (Aldwarke) (manufactures Engineering Steel [7] ) Rotherham (Brinsworth Strip Mills) Stocksbridge , South Yorkshire Motherwell, North Lanarkshire , Scotland (Dalzell Works) (manufactures Steel Plate) Cambuslang , South Lanarkshire, Scotland (Clydebridge Works) Hayange , France (Rail Mill) Bergen , Norway

In addition it has tube mills located at Corby, Stockton and Hartlepool in England and Oosterhout, Arnhem, Zwijndrecht and Maastricht in the Netherlands. It has service centres

predominantly in Northern Europe and sales offices in around 70 countries around the world. It has a color coating line in Sakarya, Turkey.

Tata is the sponsor of the Tata Steel Chess Tournament in the Netherlands and the UK triathlon team.

On 26 January 2009, Corus announced job cuts of 3500 worldwide and 2500 in the UK due the economic downturn and the reduction of steel demand. It was announced that Corus's Rotherham plant would suffer the worst cutting over 600 jobs. On the same day it was announced that Corus would be closing down its defined benefit pension scheme to new members.

[edit] Products

[edit] Construction

Corus' steel products for construction include:

"Advance" sections - standard structural sections such as universal beams, universal columns, piles and angle sections

"Celsius" sections - hot-finished hollow sections "Hybox" sections - cold-formed hollow sections Slimdek - composite metal decking

Corus publish a reference guide known as the "Blue Book", which contains details of construction steel sections, and design information to use with Eurocode 3 and BS 5950.

[edit] Electrical steels

Tata Steel Europe produce electrical steels via their subsidiary Cogent Power.[8]

Tata Steel Europe also intends to produce steel roofs that generate power, using Dyesol technology.

[edit] See also

List of steel producersFrom Wikipedia, the free encyclopediaJump to: navigation, search

This article summarizes the world steel production by company. For the country-oriented account, see Steel production by country.

Contents

 [hide]

1 Top producers by volume 2 Other major steel producers 3 Steel producers merged with other companies or no longer operating 4 References 5 External links

[edit] Top producers by volume

This is a list of the largest steel-producing companies in the world, mostly based on list by the World Steel Association. This list ranks steelmakers by volume of steel production in millions of tonnes and includes all steelmakers with production over 10 millions.

worldsteel compiles a list from its members every year. Note that due mergers year-to-year figures for some producers are not comparable. Also note that not all steel is the same, some steel is more valuable than other steel, so volume is not the same as turnover.

Ranking(2010)

2010[1] 2009[2] 2008[3] 2007[3]

Company Headquartersmillions of tonnes (T g )

1 98.2 77.5 103.3 116.4 ArcelorMittal Luxembourg

2 52.9[4] 40.2[5] 33.3 31.1 Hebei Iron and Steel China

3 37.0 31.3 35.4 28.6 Baosteel Group China

4 36.6[4] 30.3 27.7 20.2 Wuhan Iron and Steel China

5 35.4 31.1 34.7 31.1 POSCO South Korea

6 35.0 26.5 37.5 35.7 Nippon Steel Japan

7 31.1 25.8 33.0 34.0 JFE Japan

8 30.1[4] 26.4[4] 23.3 22.9 Jiangsu Shagang China

9 25.8[4] 17.3[4] 12.2 12.9 Shougang China

10 23.5[4] 21.9[4] 24.4 26.5 Tata Steel India

Ranking(2010)

2010[1] 2009[2] 2008[3] 2007[3]

Company Headquartersmillions of tonnes (T g )

11 23.2[4] 26.4[5] 21.8[6] - Shandong Iron and Steel Group China

12 22.3 15.2 23.2 21.5 United States Steel Corporation United States

13 22.1 20.1 16.0 16.2 Ansteel China

14 21.6 14.2 20.4 18.6 Gerdau Brazil

15 22.1[4] 9.1[4] 7.4[5] Benxi Steel China

16 18.3 14.0 20.4 20.0 Nucor Corporation United States

17 16.7[4] 11.0 15.9 17.0 ThyssenKrupp Germany

18 16.3 15.3 17.7 16.2 Evraz Russia

19 15.4[7][4] 14.8[5] 15.0[5] 14.2 Maanshan Iron and Steel Company China

20 15.1[4] 11.8[5] 11.3[5] 11.1 Valin Steel Group China

21 14.7[4] 16.7 19.2 17.3 Severstal Russia

22 14.0 11.3 16.0 17.9 Gruppo Riva Italy

23 13.8[4] 7.0[4] 8.2[5] Metinvest Ukraine

24 13.6 13.5 13.7 13.9 Steel Authority of India Limited India

25 13.3 11.0 14.1 13.8 Sumitomo Metal Industries Japan

26 12.9 8.4 9.9 10.0 Hyundai INI Steel South Korea

27 12.7 8.9 11.0 10.9 China Steel Taiwan

28 11.9 10.9 11.3 9.7 Novolipetsk Steel Russia

29 11.4 9.6 12.0 13.3 Magnitogorsk Iron and Steel Works Russia

30 11.4 10.6 10.0 10.1 IMIDRO Iran

31 10.1[4] 10.1[4] 9.8[5] Baotou Steel China

32 10.0[4] 8.5[4] 9.0[5] Anyang Steel China

- 1,413 1,219 1,329 1,351 World total

[edit] Other major steel producers

Aichi Steel Corporation , Japan Acerinox , Spain Allegheny Technologies , United States Altos Hornos de México , Mexico Angang Steel Company Limited , China AK Steel , formerly Armco, Middletown, Ohio, United States BlueScope Steel , primarily in Australia Commercial Metals Company , United States Companhia Siderúrgica Nacional , Brazil Dongkuk Steel in Seoul, South Korea Essar Steel , India Erdemir in Karadeniz Ereğli, Turkey

EZDK , Egypt Georgsmarienhütte GmbH, Germany Gruppo Lucchini , Italy Habas , Turkey Hadeed , Saudia Arabia Harsco Corporation , United States Ilyich Mariupol steel and iron works , Ukraine Industrias CH , Mexico Japan Steel Works , Japan Jindal Steel and Power , India '''''TATA METALIKS, REDI''''' Steel , India Kobe Steel , Japan Libyan Iron and Steel Company , Libya Maanshan Iron and Steel Company , China Mahindra Ugine Steel , India Mechel , Russia Metalloinvest , Russia Mitsui & Co. , Japan MMX Mineração , Brazil Nisshin , Japan Olympic Steel , United States OneSteel , primarily in Australia Outokumpu , based in Finland Pakistan Steel Mills Pakistan Panzhihua , China Qatar Steel , Qatar Rautaruukki , Finland Salzgitter AG , Germany Schnitzer Steel Industries , United States Sheffield Forgemasters in Sheffield, England Sidetur , Venezuela SSAB , Sweden Steel Dynamics , United States Techint , Italy Ternium - Hylsa and Imsa in Mexico, Siderar in Argentina

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2011 Mergers & Acquisitions Outlook and 2010 SummaryJanuary 17, 2011By The Investment Blogger

2011 Investment Outlook

2011 Bond Market Outlook & 2010 Review 2011 Currencies Outlook & 2010 Review 2011 Mergers & Acquisitions Outlook and 2010 Summary

Search & Hit E

NOTE: A NEWER ARTICLE HAS BEEN PUBLISHED (7/6/2011) •   2011 Mid-Year Mergers & Acquisitions Update and Outlook.

In 2010, corporate merger and acquisition (M&A) activity made a huge comeback. Most of the M&A activity involved North American companies, but activity has also increased around the world, and in various market sectors / industries.  Companies have stashed away a record amount of cash, which they have hoarded since the height of the financial crisis (2008-2009) when cash was considered king.  Acquiring companies have been spurred on by record low interest & lending rates, as well as a North American economy which has been considered as “stabilized”.  Risk in general, has been perceived to be lower than during financial crisis, and there has been an increase in corporate and investor confidence.  Even though stock prices were a lot higher in 2010 than in 2008 or 2009, the market value of companies have still remained relatively low due to a weak global economy.

M&A activity significantly increased during the second half of 2010 especially for large sized (multi-billion dollar) takeovers.   Late July, the month of August, and September, were notable for heavy merger & acquisition activity.  Those months were highlighted by the announcements of :

• 7/22/2010 – General Motors [GM] – AmeriCredit Corp ($3.5 billion).• 7/29/2010 – Sanofi-Aventis [SNY] – Genzyme [GENZ] ($18.5 billion).• 8/14/2010 -BHP Billiton [BHP] – Potash Corp [POT/tse:POT] ($40 billion).• 8/19/2010 – Intel [INTC] – McAfee [MFE] ($7.7 billion).• 9/2/2010 – Goldcorp [GG/tse:G] – Andean Resources Ltd [tse:AND] ($3.4 billion).• 9/17/2010 – Johnson & Johson [JNJ] – Crucell [CRXL] ($2.3 billion).• 9/27/2010 – Unilever Plc [UL] – Alberto Culver [ACV] ($3.7 billion).

Takeovers have continued and also increased after September to the end of the year with no let down in activity.  We expect conditions to continue that make mergers & acquisitions very attractive for companies in 2011.

.

2011 Financial, Insurance, and Investment Sector M&A Outlook

The M&A activity in the US financial, insurance, and investment sectors can be expected to slow or remain at same pace in 2011.  The massive mergers have already occurred in 2008-2009

during the height of crisis.  In 2010, there were a significant number of smaller deals made by the stronger US financial companies/banks.  In particular, Wells Fargo [WFC], Umpqua [UMPQ], and US Bancorp [USB], had all completed several smaller deals (both financial institutions and insurance businesses) that went relatively unnoticed during 2009-2010.  One of the larger exceptions last year was the Berkshire Hathaway [BRK.A/BRK.B] and Sun Life Financial [SLF/tse:SLF] reinsurance deal ($109 billion).   The reason there may have been less deals, may have been due to the operations of small financial companies being acquired via the Federal Deposit and Insurance Corporation (FDIC) facilitated transactions, and therefore they were not really considered traditional/conventional M&A deals by many.

In 2011 we can expect that most M&As will still be the smaller sized financial deals, such as the FDIC facilitated acquisitions.  We expect small and regional financial firms to continue being seized by the FDIC. Conditions likely to affect/limit the ability of the larger financial firms to complete large mergers and takeovers are the Vockler and Basel III rules, as  they are more strict.  Firms won’t be willing to make bold takeovers without being more cautious, or unless they are confident enough in their financial strength.  We can also expect small and mid sized insurance and investment management deals to continue roughly at same pace as in 2010 .  Furthermore, it is important to note that entire take overs may be less likely in these two sectors, giving way to takeovers of certain units or divisions.  The US economy is still very weak with an  extremely high unemployment level, that hasn’t really declined since the height of the crisis. Sustained job creation over many months has yet to be seen, and US consumers still have trouble repaying debts.  These will be the major conditions affecting the financial, insurance, and  investment sectors.  The negative conditions foster uncertainty, weakened market values, and lasting risk concerns, which give way to takeovers by stronger companies (either through conventional means or FDIC facilitated acquisitions).

The financial sector M&A activity by Canadian companies is expected to continue in 2011. However, it will be in lower numbers compared to those made by US corporations (due to far fewer Canadian companies relative to the US).   The Canadian financial sector has been stronger than most developed nations, and financial institutions in Canada also have much more cash.  In recent months The Bank of Nova Scotia [BNS/tse:BNS], Toronto-Dominion Bank  [TD/tse:TD],  and Bank of Montreal [BMO/tse:BMO]  announced acquisition deals:

• 11/22/2010 – The Bank of Nova Scotia [BNS/tse:BNS] agreed to acquire all shares of DundeeWealth Inc [tse:DW] ($3.2 billion).• 12/7/2010 – Toronto-Dominion Bank [TD/tse:TD] agreed to acquire Chrysler Financial, the auto lender owned by Cerberus Capital Management ($6.3 billion).• 12/17/2010 – Bank of Montreal [BMO/tse:BMO] announced it was buying Marshall & Ilsley Corp [MI] ($4.1 billion).

In 2011, other Canadian financial institutions may feel need to make a deal to increase its global market share.   In addition, a strong Canadian dollar will help in deal making. On December 31st 2010, the Canadian dollar had a value of 1.0042 USD.  Factors that would influence or limit acquisitions by Canadian financial companies would include a widening trade gap (widen to significant levels),  year end household debt levels that rose to 144% of disposable income, and

interest rates that are expected to rise in 2011 (which will put pressure on the Canadian economy and households).

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2011 Commodities M&A Outlook

Worldwide demand for commodities will continue to increase in 2011 and the  following years, as the global population grows, currencies devalue, national debts increase, and massive inflation looms.  Demand for commodities from developed nations, and especially from emerging markets will contribute to the huge increase.    We expect further consolidation, and M&A activity to increase significantly in the commodity industry in 2011.  Much of the activity in particular will be in the minerals used for fertilizers, oil & natural gas, and mining (metals) industries.  Small, mid, as well as a large-sized deals can be expected given the present conditions.  The majority will be larger companies taking over the smaller juniors, with other deals being mergers of equals.

Foreign takeovers of smaller Canadian companies are likely to occur more frequent than companies from any other single nation.  Canada is extremely rich in natural resources related to energy (coal, oil, natural gas, uranium, etc), as well as in metals, and fertilizer related minerals. Some examples of smaller Canadian companies taken over in 2010 include the following:

• 1/28/2010 – BHP Billiton’s [BHP] acquisition of Athabasca Potash Inc. (API), with a total equity value of approximately $341 million CDN ($320 million USD).• 8/14/2010 – BHP Billiton’s [BHP] announced intention to acquire all outstanding common shares of Potash Corporation of Saskatchewan Inc. [POT/tse:POT] at a price of US$130 per share (approximately US$40 billion), which was eventually rejected by the company and the Canadian government.• 11/22/2010 – European fertilizer giant K+S Group’s $434 million takeover of Potash One Inc [tse:KCL].

It can be expected that the large commodity giants from developed nations will be very active on the merger & acquisition front this year.  Larger companies (both public/private and state-owned) from BRIC nations (Brazil, Russia, India, China), especially Russia, China, and Brazil, will likely be ones that will acquire smaller companies, rather than be acquired.

During the past week, as this article was being edited, M&A activity had already increased. Canadian copper miners Inmet Mining Corp [tse:IMN] and Lundin Mining Corp [tse:LUN] agreed to a huge $9 billion merger, creating a global copper powerhouse.  On January 11, 2011, Cliffs Natural Resources Inc. [CLF] announced it will acquire Consolidated Thompson Iron Mines Limited [tse:CLM] for $4.9 billion CDN.   Junior mining companies with good potential of being takeover targets include those with both promising exploration results and prospective land packages that are neighbouring larger companies.

In the energy sector, the demand for the various resources used to generate and store it will increase along with energy usage. This will cause the price of the related commodities (oil,

natural gas, lithium, uranium, natural gas, copper, etc) to increase across the board and continue for the next few years.  As a result, energy related M&A deals will also continue to heat up in 2011.  Not only will we see mergers & acquisitions, but also more joint ventures.  Last year (December 17, 2010) France’s Total S.A. [TOT] announced a $1.75 billion CDN partnership with Suncor Energy [SU/tse:SU] in Canada’s oil sands.  Alberta’s oil sands are seen as the world’s largest source of potential crude oil outside of the Middle East.  In recent years, billions of dollars have been invested into the area, which has been targeted by the global oil industry.

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2011 Biotechnology, Pharmaceutical, and Health Care Sector M&A Outlook

There has been more M&A activity in the biotechnology, pharmaceuticals, and health care sectors during 2008-2009, but slightly less in 2010.  However, the big M&A deal to watch in 2011 will be the outcome of Sanofi-Aventis [SNY] and Genzyme [GENZ].  Most large companies in the industry have already completed many multi-million and multi-billion dollar deals within the last 2 years alone.  This includes names such as Merck, Wyeth, Schering-Plough, Sanofi-Aventis, AstraZeneca, Johnson&Johnson, Bristol-Myers Squibb, GlaxoSmithKline, etc.  These acquisitions ranged from small, mid, to large sized companies in a wide range of industries including consumer, health, generics, animal health, vaccines, diabetes, cancer, etc.  Many joint ventures have also been completed as well.  Despite the busy M&A activity in recent years, it can be expected that further consolidation and joint ventures continue at a fairly moderate pace in 2011 and beyond.  Many large companies have hoards of cash, and will likely spend it on small to mid-size deals/companies.  The Sanofi-Aventis and Genzyme deal may be the largest deal of the year in the industry.  Potential takeover targets include smaller highly specialized niche players, with good research pipelines, but also lack financial muscle or production expertise.  Specialized niche areas include vaccines (highly sought after in recent years), cancer, diabetes, gene therapy, rare/infectious diseases, etc.  We can also expect smaller generic manufacturers to be takeover targets as the larger companies try to diversify, seek downside protection from expiring drug patents, and limit the negative financial impact of other larger generics.

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2011 Real Estate M&A Outlook

In real estate, it is likely that the increase in activity will be moderate compared to 2010.  Most deal making in this sector by the larger players have already occurred in the last 3 years.  It is expected that the majority of real estate deals in 2011 will not consist of entire takeovers, but of property portfolios.  Two real estate companies to watch in particular are Brookfield Properties Corporation [BPO/tse:BPO] and Riocan Real Estate Investment Trust [tse:REI.UN] .  They are among the strongest real estate companies in North America and have large reserves of cash. Both companies have made many acquisitions in 2010, including Brookfield’s acquisition of a portfolio consisting of 16 Australian properties, and Riocan’s US mall acquisitions.  Both companies have indicated that they would continue to look for opportunities.  It is very likely

that they will continue in 2011 and take advantage of lower lending rates, weakened competitors, and low real estate valuations.

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2011 M&A Outlook For Other Sectors

In general, we can expect M&A activity to increase across most industries (food, real estate, retail, technology, consumer, etc).  M&A of companies in emerging markets by those in wealthier developed nations is expected to increase in 2011, as capital inflows into emerging markets continue to increase.  With low interest rates, those in developed countries will seek higher rates of returns and high growth markets. Markets in developed nations are becoming mature and saturated, compared to the robust growth in developing nations.  Nations of interest for takeover targets include India, China, Brazil, Argentina, Mexico, and some Eastern European countries like Czech Republic, Russia and former USSR nations.  However Brazilian companies, as well as private/public/state-owned Chinese and Russian companies, are also likely do takeovers of their own.

It is important to note that one issue that we expect to see more of, that will limit larger foreign takeovers in general, are the protectionist and national interest issues that have emerged.  In Canada, we’ve seen the government’s rejection of BHP Billiton’s [BHP] $38.6 billion hostile takeover of Potash Corp [POT/tse:POT] in 2010, and Alliant Techsystems Inc’s [ATK] friendly $1.32 billion takeover of Macdonald Dettwiler & Associates Ltd [tse:MDA] in 2008.

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This article only touches on a few issues, but it should help investors as a starting point with their own research and analysis.  It is important to note that this article is meant to outline conditions which are likely to affect M&A activity in the sectors/industries mentioned.  Keep in mind the information in this article is not meant to be a set of predictions.  It is meant as a discussion of highly probable scenarios of what we can expect to see happen, based on the information available today.  By knowing the likely possibilities, we can plan for them.  We can also capitalize on potential opportunities,  and will not be caught off guard by possible negative events.  Investors should also remain flexible in their view & outlook, and change it as the influencing conditions change.

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DISCLOSURE: I hold shares of Sanofi-Aventis, Johnson & Johnson, Wells Fargo & Co, Umpqua, US Bancorp, Berkshire Hathaway, Brookfield Properties Corporation, and Riocan REIT .

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Top 10 Mergers & Acquisitions in India for 2010

Tata Chemicals buys British salt

Tata Chemicals bought British Salt; a UK based white salt producing company for about US $ 13 billion. The acquisition gives Tata access to very strong brine supplies and also access to British Salt’s facilities as it produces about 800,000 tons of pure white salt every year

Reliance Power and Reliance Natural Resources merger

This deal was valued at US $11 billion and turned out to be one of the biggest deals of the year. It eased out the path for Reliance power to get natural gas for its power projects

Airtel’s acquisition of Zain in Africa

Airtel acquired Zain at about US $ 10.7 billion to become the third biggest telecom major in the world. Since Zain is one of the biggest players in Africa covering over 15 countries, Airtel’s acquisition gave it the opportunity to establish its base in one of the most important markets in the coming decade

Abbott’s acquisition of Piramal healthcare solutions

Abbott acquired Piramal healthcare solutions at US $ 3.72 billion which was 9 times its sales. Though the valuation of this deal made Piramal’s take this move, Abbott benefited greatly by moving to leadership position in the Indian market

GTL Infrastructure acquisition of Aircel towers

This acquisition was worth about US $ 1.8 billion and brought GTL Infrastructure to the third position in terms of number of mobile towers – 33000. The money generated gave Aircel the funds for expansion throughout the country and also for rolling out its 3G services

ICICI Bank buys Bank of Rajasthan

This merger between the two for a price of Rs 3000 cr would help ICICI improve its market share in northern as well as western India

JSW and Ispat Ki Kahani

Jindal Steel Works acquired 41% stake at Rs 2,157 cr in Ispat Industries to make it the largest steel producer in the country. This move would also help Ispat return to profitability with time

Reckitt Benckiser goes shopping

Reckitt acquired Paras Pharma at a price of US $ 726 million to basically strengthen its healthcare business in the country. This was Reckitt’s move to establish itself as a strong consumer healthcare player in the fast growing Indian market

Mahindra goes international

Mahindra acquired a 70% controlling stake in troubled South Korea auto major Ssang Yong at US $ 463 million. Along with the edge it would give Mahindra in terms of the R & D capabilities, this deal would also help them utilise the 98 country strong dealer network of Ssang Yong

Fortis Healthcare acquisitions

Fortis Healthcare, the unlisted company owned by Malvinder and Shivinder Singh looks set to make it two in two in terms of acquisitions. After acquiring Hong Kong’s Quality Healthcare Asia Ltd for around Rs 882 cr last month, they are planning on acquiring Dental Corp, the largest dental services provider in Australia at Rs 450 cr

As you see in the list, the M & A’s have happened across industries and sectors like banking, automotive, healthcare, FMCG, telecom etc. This shows that this really has been the dream year of Indian industry.

2010 M&A ForecastPosted on Monday, 7 December 2009. Filed under: Commentary, Mergers |

It’s December and the M&A market is mostly closed for the year.  This isn’t the month when many deals are done (although I would love to be surprised by a big announcement in the next several weeks, it would be a surprise!).  We’ve discussed this recently here, where we showed that it is rare for deals to be announced in the last quarter of the year.  Note by the way that this dearth of year-end announcements is related to the very large (mega-) deals, as smaller ones don’t show such an historical trend.

In any case, the focus is now on 2010.  Will it be better than 2009?  2008?

Of course, my crystal ball is as foggy as anyone’s.  However, ever willing to stick my head out, here goes:

First, despite an overall lack of European outbound M&A in 2009 (Financial News reported in mid-November that volume of such deals was its lowest since 2004), I believe the interest in globalisation hasn’t diminished in the board room, although the appetite to take on such risks has decreased.  Especially in Europe, it appears.  I believe as the new year starts and 2008 and 2009 are put behind us, the interest in growth will reappear including acquisition as a means of such growth.

Second, financial sponsors (hedge funds, private equity funds, venture capitalists) will return.  In the first nine months of 2009, only about 3% of global M&A volumes were from these groups — the lowest since 2000 and well down from the approximately 25% of 2007′s volume.  Of course, they helped drive the last merger wave that ended in 2007 (indeed, one-third of all deals in private equity’s 30-year history took place in 2006 and 2007).  Check out this report  from Private Equity News. Even a small increase in this percentage in overall terms could be a catalyst to the growth of M&A in 2010.  I may eat my words, but I don’t think it can go any lower what with the backlog of money to invest in the pipeline (it was reported that at the start of 2009, there.  It has to go somewhere, and the financial sponsors are very reticent to return it to their limited partners!

Third, the emerging markets remain of great interest.  China’s M&A market (again, according to Financial News) is up 6% on last year, which makes it one of the bright spots in the global M&A market.  Not just China, but other Asian markets will be places where firms need to expand.  I actually believe this trend may be the catalyst to the next merger wave when it appears — hopefully in 2010!

Fourth, and perhaps even most important, there’s optimism in board rooms.  We noted in an earlier blog (see:  ‘What Next in M&A‘ and the related research from Intralinks) that there’s an expectation now that more deals will be done next year by a majority of board-level executives interviewed.  This can be a self-fulfilling prophesy, as the M&A market rises and falls based on

the willingness of boards to approve deals and their confidence (usually misplaced, by-the-way, even in rising markets) that the deals will increase profits, market share, shareholder returns, etc.

Now, what about the timing?  I hear from many advisors that the backlog isn’t great.  This would indicate that we won’t necessarily see an immediate increase in deal.  Offsetting this is another fact from talking to those advisors:  most are busier than they have been in a couple years.  Part of this busy-ness is due to the reduction in the size of the M&A teams in the past 18 months, but this doesn’t explain it all as even those teams not reduced (and yes, there ARE some around in the more forward-looking advisory firms) say they are working flat out.  I’ve been trying to meet up with one of them for the past several months and it was never was possible in evenings or even weekends, and we finally had to settle for a 7:30am breakfast earlier this week — at which I was informed that she hadn’t had more than 5 hours sleep in any day in the past three weeks.  Although probably not good for her personal health, it probably IS for the health of the advisor’s bottom line and the M&A market in general.

And let’s not forget as well that the debt markets are not fully open again for acquisition finance.  No one expects an era of easy financing to return anytime soon, but it does have to ease up somewhat for the market to return to anything like the volumes of a few years ago.

Anyone else with thoughts on the timing?

Mergers and Acquisition - A Case Study and Analysis of HP-Compaq MergerBy Rohit Agrawal

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Brief Description

The following is a brief description of the two companies:

HP

It all began in the year 1938 when two electrical engineering graduates from Stanford University called William Hewlett and David Packard started their business in a garage in Palo Alto. In a year's time, the partnership called Hewlett-Packard was made and by the year 1947, HP was incorporated. The company has been prospering ever since as its profits grew from five and half million dollars in 1951 to about 3 billion dollars in 1981. The pace of growth knew no bounds as HP's net revenue went up to 42 billion dollars in 1997. Starting with manufacturing audio oscillators, the company made its first computer in the year 1966 and it was by 1972 that it introduced the concept of personal computing by a calculator first which was further advanced into a personal computer in the year 1980. The company is also known for the laser-printer which it introduced in the year 1985.

Compaq

The company is better known as Compaq Computer Corporation. This was company that started itself as a personal computer company in the year 1982. It had the charm of being called the largest manufacturers of personal computing devices worldwide. The company was formed by two senior managers at Texas Instruments. The name of the company had come from-"Compatibility and Quality". The company introduced its first computer in the year 1983 after at a price of 2995 dollars. In spite of being portable, the problem with the computer was that it seemed to be a suitcase. Nevertheless, there were huge commercial benefits from the computer as it sold more than 53,000 units in the first year with a revenue generation of 111 million dollars.

Reasons for the Merger

A very simple question that arises here is that, if HP was progressing at such a tremendous pace, what was the reason that the company had to merge with Compaq? Carly Fiorina, who became the CEO of HP in the year 1999, had a key role to play in the merger that took place in 2001. She was the first woman to have taken over as CEO of such a big company and the first outsider too. She worked very efficiently as she travelled more than 250,000 miles in the first year as a CEO. Her basic aim was to modernize the culture of operation of HP. She laid great emphasis on the profitable sides of the business. This shows that she was very extravagant in her approach as a CEO. In spite of the growth in the market value of HP's share from 54.43 to 74.48 dollars, the company was still inefficient. This was because it could not meet the targets due to a failure of both company and industry. HP was forced to cut down on jobs and also be eluded from the privilege of having Price Water House Cooper's to take care of its audit. So, even the job of Fiorina was under threat. This meant that improvement in the internal strategies of the company was not going to be sufficient for the company's success. Ultimately, the company had to certainly plan out something different. So, it was decided that the company would be acquiring Compaq in a stock transaction whose net worth was 25 billion dollars. Initially, this merger was not planned. It started with a telephonic conversation between CEO HP, Fiorina and Chairman and CEO Compaq, Capellas. The idea behind the conversation was to discuss on a licensing agreement but it continued as a discussion on competitive strategy and finally a merger. It took two months for further studies and by September, 2001, the boards of the two companies approved of the merger. In spite of the decision coming from the CEO of HP, the merger was strongly opposed in the company. The two CEOs believed that the only way to fight the growing competition in terms of prices was to have a merger. But the investors and the other stakeholders thought that the company would never be able to have the loyalty of the Compaq customers, if products are sold with an HP logo on it. Other than this, there were questions on the synchronization of the organization's members with each other. This was because of the change in the organization culture as well. Even though these were supposed to serious problems with respect to the merger, the CEO of HP, Fiorina justified the same with the fact that the merger would remove one serious competitor in the over-supplied PC market of those days. She said that the market share of the company is bound to increase with the merger and also the working unit would double. (Hoopes, 2001)

Advantages of the Merger

Even though it seemed to be advantageous to very few people in the beginning, it was the strong determination of Fiorina that she was able to stand by her decision. Wall Street and all her investors had gone against the company lampooning her ideas with the saying that she has made 1+1=1.5 by her extravagant ways of expansion. Fiorina had put it this way that after the company's merger, not only would it have a larger share in the market but also the units of production would double. This would mean that the company would grow tremendously in volume. Her dream of competing with the giants in the field, IBM would also come true. She was of the view that much of the redundancy in the two companies would decrease as the internal costs on promotion, marketing and shipping would come down with the merger. This would produce the slightest harm to the collection of revenue. She used the ideas of competitive positioning to justify her plans of the merger. She said that the merger is based on the ideologies

of consolidation and not on diversification. She could also defend allegations against the change in the HP was. She was of the view that the HP has always encouraged changes as it is about innovating and taking bold steps. She said that the company requires being consistent with creativity, improvement and modification. This merger had the capability of providing exactly the same. (Mergers and Acquisitions, 2010)

Advantages to the Shareholders

The following are the ways in which the company can be advantageous to its shareholders:

Unique Opportunity: The position of the enterprise is bound to better with the merger. The reason for the same was that now the value creation would be fresh, leadership qualities would improve, capabilities would improve and so would the sales and also the company's strategic differentiation would be better than the existing competitors. Other than this, one can also access the capabilities of Compaq directly hence reducing the cost structure in becoming the largest in the industry. Finally, one could also see an opportunity in reinvesting.

Stronger Company: The profitability is bound to increase in the enterprise, access and services sectors in high degrees. The company can also see a better opportunity in its research and development. The financial conditions of the company with respect to its EBIT and net cash are also on the incremental side.

Compelling Economics: The expected accumulation in IIP gains would be 13% in the first financial year. The company could also conduct a better segmentation of the market to forecast its revenues generation. This would go to as much as 2 and a half billion dollars of annual synergy.

Ability to Execute: As there would be integration in the planning procedures of the company, the chances of value creation would also be huge. Along with that the experience of leading a diversified employee structure would also be there. (HP to buy Compaq, 2001) Opposition to the Merger

In fact, it was only CEO Fiorina who was in favor of going with the merger. This is a practical application of Agency problem that arises because of change in financial strategies of the company owners and the management. Fiorina was certain to lose her job if the merger didn't take effect. The reason was that HP was not able to meet the demand targets under her leadership. But the owners were against the merger due to the following beliefs of the owners:

The new portfolio would be less preferable: The position of the company as a larger supplier of PCs would certainly increase the amount of risk and involve a lot of investment as well. Another important reason in this context is that HP's prime interest in Imaging and Printing would not exist anymore as a result diluting the interest of the stockholders. In fact the company owners also feel that there would be a lower margin and ROI (return on investment).

Strategic Problems would remain Unsolved: The market position in high-end servers and services would still remain in spite of the merger. The price of the PCS would not come down to

be affordable by all. The requisite change in material for imaging and printing also would not exist. This merger would have no effect on the low end servers as Dell would be there in the lead and high-end servers either where IBM and Sun would have the lead. The company would also be eluded from the advantages of outsourcing because of the surplus labor it would have. So, the quality is not guaranteed to improve. Finally, the merger would not equal IBM under any condition as thought by Fiorina.

Huge Integrated Risks: There have been no examples of success with such huge mergers. Generally when the market doesn't support such mergers, don't do well as is the case here. When HP could not manage its organization properly, integration would only add on to the difficulties. It would be even more difficult under the conditions because of the existing competitions between HP and Compaq. Being prone to such risky conditions, the company would also have to vary its costs causing greater trouble for the owner. The biggest factor of all is that to integrate the culture existing in the two companies would be a very difficult job.

Financial Impact: This is mostly because the market reactions are negative. On the other hand, the position of Compaq was totally different from HP. As the company would have a greater contribution to the revenue and HP being diluted at the same time, the problems are bound to develop. This would mean that drawing money from the equity market would also be difficult for HP. In fact this might not seem to be a very profitable merger for Compaq as well in the future.

The basic problem that the owners of the company had with this merger was that it would hamper the core values of HP. They felt that it is better to preserve wealth rather than to risk it with extravagant risk taking. This high risk profile of Fiorina was a little unacceptable for the owners of the company in light of its prospects.

So, as far as this merger between HP and Compaq is concerned, on side there was this strong determination of the CEO, Fiorina and on the other side was the strong opposition from the company owners. This opposition continued from the market including all the investors of the company. So, this practical Agency problem was very famous considering the fact that it contained two of the most powerful hardware companies in the world. There were a number of options like Change Management, Economic wise Management, and Organizational Management which could be considered to analyze the issue. But this case study can be solved best by a strategy wise analysis. (HP-Compaq merger faces stiff opposition from shareholders stock prices fall again, 2001)

Strategic Analysis of the Case

Positive Aspects

A CEO will always consider such a merger to be an occasion to take a competitive advantage over its rivals like IBM as in this case and also be of some interest to the shareholders as well. The following are the strategies that are related to this merger between HP and Compaq:

* Having an eye over shareholders' value: If one sees this merger from the eyes of Fiorina, it would be certain that the shareholders have a lot to gain from it. The reason for the same is the

increment in the control of the market. So, even of the conditions were not suitable from the financial perspective, this truth would certainly make a lot of profits for the company in the future.

* Development of Markets: Two organizations get involved in mergers as they want to expand their market both on the domestic and the international level. Integration with a domestic company doesn't need much effort but when a company merges internationally as in this case, a challenging task is on head. A thorough situation scanning is significant before putting your feet in International arena. Here, the competitor for HP was Compaq to a large degree, so this merger certainly required a lot of thinking. Organizations merge with the international companies in order to set up their brands first and let people know about what they are capable of and also what they eye in the future. This is the reason that after this merger the products of Compaq would also have the logo of HP. Once the market is well-known, then HP would not have to suffer the branding created by Compaq. They would be able to draw all the customers of Compaq as well.

* Propagated Efficiencies: Any company by acquiring another or by merging makes an attempt to add to its efficiencies by increasing the operations and also having control over it to the maximum extent. We can see that HP would now have an increased set of employees. The only factor is that they would have to be controlled properly as they are of different organizational cultures. (Benefits of Mergers:, 2010)

* Allowances to use more resources: An improvised organization of monetary resources, intellectual capital and raw materials offers a competitive advantage to the companies. When such companies merge, many of the intellects come together and work towards a common mission to excel with financial profits to the company. Here, one can't deny the fact that even the top brains of Compaq would be taking part in forming the strategies of the company in the future.

* Management of risks: If we particularly take an example of this case, HP and Compaq entering into this merger can decrease the risk level they would have diversified business opportunities. The options for making choice of the supply chain also increase. Now even though HP is a pioneer in inkjet orienting, it would not have to use the Product based Facility layout which is more expensive. It can manage the risk of taking process based facility layout and make things cheaper. Manufacturing and Processing can now be done in various nations according to the cost viability as the major issue.

* Listing potential: Even though Wall Street and all the investors of the company are against the merger, when IPOs are offered, a development will definitely be there because of the flourishing earnings and turnover value which HP would be making with this merger.

* Necessary political regulations: When organizations take a leap into other nations, they need to consider the different regulations in that country which administer the policies of the place. As HP is already a pioneer in all the countries that Compaq used to do its business, this would not be of much difficulty for the company. The company would only need to make certain minor

regulations with the political parties of some countries where Compaq was flourishing more than HP.

* Better Opportunities: When companies merge with another company, later they can put up for sale as per as the needs of the company. This could also be done partially. If HP feels that it would not need much of warehouse space it can sell the same at increased profits. It depends on whether the company would now be regarded a s a make to stock or a make to order company.

* Extra products, services, and facilities: Services get copyrights which enhances the level of trade. Additional Warehouse services and distribution channels offer business values. Here HP can use all such values integrated with Compaq so as to increase its prospects. (Berry, 2010)

Negative Aspects

There are a number of mergers and acquisitions that fail before they actually start to function. In the critical phase of implementation itself, the companies come to know that it would not be beneficial if they continue as a merger. This can occur in this merger between HP and Compaq due to the following reasons.

Conversations are not implemented: Because of unlike cultures, ambitions and risk profiles; many of the deals are cancelled. As per as the reactions of the owners of HP, this seems to be extremely likely. So, motivation amongst the employees is an extremely important consideration in this case. This requires an extra effort by the CEO, Fiorina. This could also help her maintain her position in the company.

Legal Contemplations: Anti-competitive deals are often limited by the rules presiding over the competition rules in a country. This leads to out of order functioning of one company and they try to separate from each other. A lot of unnecessary marketing failures get attached to these conditions. If this happens in this case, then all that money which went in publicizing the venture would go to be a waste. Moreover, even more would be required to re-promote as a single entity. Even the packaging where the entire inventory from Compaq had the logo of HP would have to be re-done, thus hampering the finance even further. (Broc Romanek, 2002)

Compatibility problems: Every company runs on different platforms and ideas. Compatibility problems often occur because of synchronization issues. In IT companies such as HP and Compaq, many problems can take place because both the companies have worked on different strategies in the past. Now, it might not seem necessary for the HP management to make changes as per as those from Compaq. Thus such problems have become of greatest concern these days.

Fiscal catastrophes: Both the companies after signing an agreement hope to have some return on the money they have put in to make this merger happen and also desire profitability and turnovers. If due to any reason, they are not able to attain that position, then they develop a abhorrence sense towards each other and also start charging each other for the failure.

Human Resource Differences: Problems as a result of cultural dissimilarities, hospitality and hostility issues, and also other behavior related issues can take apart the origin of the merger.

Lack of Determination: When organizations involve, they have plans in their minds, they have a vision set; but because of a variety of problems as mentioned above, development of the combined company to accomplish its mission is delayed. Merged companies set the goal and when the goal is not accomplished due to some faults of any of the two; then both of them develop a certain degree of hatred for each other. Also clashes can occur because of bias reactions. (William, 2008)

Risk management failure: Companies that are involved in mergers and acquisitions, become over confident that they are going to make a profit out of this decision. This can be seen as with Fiorina. In fact she can fight the whole world for that. When their self-confidence turns out into over-confidence then they fail. Adequate risk management methods should be adopted which would take care of the effects if the decision takes a downturn. These risk policies should rule fiscal, productions, marketing, manufacturing, and inventory and HR risks associated with the merger.

Strategic Sharing

Marketing

Hp and Compaq would now have common channels as far as their buying is concerned. So, the benefits in this concern is that even for those materials which were initially of high cost for HP would now be available at a cheaper price. The end users are also likely to increase. Now, the company can re frame its competitive strategy where the greatest concern can be given to all time rivals IBM. The advantages of this merger in the field of marketing can be seen in the case of shared branding, sales and service. Even the distribution procedure is likely to be enhanced with Compaq playing its part. Now, the company can look forward to cross selling, subsidization and also a reduced cost. Operations

The foremost advantage in this area is that in the location of raw material. Even the processing style would be same making the products and services synchronized with the ideas and also in making a decent operational strategy. As the philosophical and mechanical control would also be in common, the operational strategy would now be to become the top most in the market. In this respect, the two companies would now have co-production, design and also location of staff. So, the operational strategy of HP would now be to use the process based facility layout and function with the mentioned shared values. Technology

The technical strategy of the company can also be designed in common now. There is a disadvantage from the perspective of the differentiation that HP had in the field of inkjet printers but the advantages are also plentiful. With a common product and process technology, the technological strategy of the merged company would promote highly economical functioning. This can be done through a common research and development and designing team. Buying

The buying strategy of the company would also follow a common mechanism. Here, the raw materials, machinery, and power would be common hence decreasing the cost once again. This can be done through a centralized mechanism with a lead purchaser keeping common policies in mind. Now Hp would have to think with a similar attitude for both inkjet printers as well as personal computers. This is because the parameters for manufacturing would also run on equal grounds. Infrastructure

This is the most important part of the strategies that would be made after the merger. The companies would have common shareholders for providing the requisite infrastructure. The capital source, management style, and legislation would also be in common. So, the infrastructure strategies would have to take these things into account. This can be done by having a common accounting system. HP does have an option to have a separate accounting system for the products that it manufactures but that would only arouse an internal competition. So, the infrastructural benefits can be made through a common accounting, legal and human resource system. This would ensure that the investment relations of the company would improve. None of the Compaq investors would hesitate in making an investment if HP follows a common strategy.

HP would now have to ensure another fact that with this merger they would be able to prove competitors to the present target and those of competitors like IBM as well. Even the operations and the output market needs to be above what exists at present. The company needs to ensure that the corporate strategy that it uses is efficient enough to help such a future. The degree of diversification needs to be managed thoroughly as well. This is because; the products from the two companies have performed exceptionally well in the past. So, the most optimum degree of diversification is required under the context so that the company is able to meet the demands of the customers. This has been challenged by the owners of HP but needs to be carried by the CEO Fiorina. (Bhattacharya, 2010)

I am a pre final year student at the Indian Institute of Information Technology and Management, Gwalior, India pursuing a five year integrated course (dual degree) leading to the award of B.Tech (Information Technology) and MBA. I am currently in the 9th Semester. ABV-IIITM Gwalior, a Deemed University, is an apex Institute, established by the ministry of HRD (Human Resource Development), Government of India.

The competitive environment at my Institute coupled with my inherent trait of trying to learn something new from each experience has made me come a long way in these four years. I have not only learnt to work under pressure and intense competition with some of the brightest students in the country but have also worked with an esteemed KPO called CBI Solutions in the meanwhile. This has given me the experience to get exposed to some of the most challenging marketing traits in the business. Moreover, I have been awarded first rank for IT and Entrepreneurship at the end of my 7th Semester.

I have been privileged to work at Polaris Retail Infotech Limited, Gurgaon from May to July'08. This taught me the practical application of relationship marketing as I saw the preparation of customer interfaces through their software Smart Store. This is visible at billing counters at retail stores of the fame of Shopper's Stop. Also, I've been in the editorial board of my college

magazine, La Vista for the past 3 years and eventually I hold the responsibility of the Chief Editor.

Tata Chemicals Buys UK's British Salt For Rs 673CrBY MADHAV A. CHANCHANI

The PE-owned British Salt, one of UK's largest makers of salt, enjoys 50% market share.

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Adding to its string of cross-border acquisitions, Tata Group firm Tata Chemicals Ltd has bought 100% stake British Salt Limited, a United Kingdom-based chemical company that produces pure

white salt, for £93 million or Rs 673 crore. 

The deal to acquire private equity owned British Salt was done through Tata Chemical's wholly owned subsidiary Brunner Mond. The deal will be entirely debt financed with no recourse to Tata Chemicals, said the firm in a statement.The share price of Tata Chemicals went up by more than 2% in morning trade to Rs 379.45, before coming down to Rs 375 levels. The $70 billion Tata Group has completed several major acquisitions, several of them coming in UK. Tata Steel had acquired steelmaker Corus for $12.9 billion in 2007 followed by Tata Motors buying Jaguar Land Rover businesses from Ford Motor Company for $2.3 billion in 2008.British Salt is one of UK's largest manufacturer of pure dried vacuum salt and enjoys a market share of 50% in the country. British Salt owns brine wells in the UK with residual life of 50 years. It employs 125 people, and produces approximately 800,000 tonnes of pure white salt every year. This acquisition provides an opportunity to secure long term brine supplies for Brunner Monds operations. Tata Chemicals had acquired UK's Brunner Mond, which has operations in Kenya and Netherlands in 2005 for $113 million.Pure white salt is used in making water softeners, chemical industry, food processing, textiles & tanning, among others. British Salt is also active in the gas storage business and has a promising business model which has a potential to generate additional cash flows for the business, added the Tata Chemicals statement.UK mid-market PE firm LDC bought British Salt from its previous owners US Salt Holdings LLC in a £100-million management buy-out in 2007. US Salt had bought British Salt from its previous owners, Stavely Industries plc in 2000 for £80 million. LDC, part of the Lloyds Banking Group, sold the gas storage facility of British Salt to EDF Energy in July 2009.

Tata Chemicals B

http://w w w .vccircle.com/500/new s/tata-chemicals-buys-uks-

Tata Chemicals had revenues of Rs 9,543.79 and a net profit of Rs 724 crore in FY10. According to its AGM presentation, the vacuum salt business accounted for 7% of the revenues while soda ash constituted a major 45%. Other major contributors were fertiliser and urea. The company's net debt to equity ratio fell from 1.11 to 0.81 from FY09 to FY10.Tata Chemicals subsidiary Rallis India recently acquired a majority 59% stake in Bangalore-based seed company Metahelix Life Sciences Pvt Ltd for Rs 125 crore. The Tata group firm has done some big acquisitions like in March 2008 it acquired US-based General Chemical Industrial Products Inc for $1 billion to become the world’s second largest maker of soda ash.

Tata Chemical's arm completes acquisition of British SaltPTI Jan 19, 2011, 09.55pm ISTTags:

United Kingdom | Tata Chemicals Ltd. | Middlewich

MUMBAI: Tata Chemicals today said its wholly-owned UK arm Brunner Mond has completed the acquisition of Cheshire Salt Holdings Ltd (CSHL), parent company of British Salt.

Brunner Mond has received the requisite regulatory approvals to complete the acquisition of Cheshire Salt Holdings, Tata Chemicals said in a statement here.

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"The acquisition provides an opportunity to secure long-term brine supplies for Brunner Mond operations," Tata Chemicals Managing Director R Mukundan said.

This acquisition was for 93 million pounds (around Rs 650 crore).

Apart from the core business of salt manufacturing and supplying, British Salt's profitability in the gas storage business makes this a promising business model which has the potential to generate additional cash flows for the enterprise, Mukundan had earlier said.

Mukundan had said that the acquisition will not only help Tata Chemicals strengthen its presence in the processed food market but also help Bruner Mond to maintain a low-cost manufacturing position in Europe.

It will also help the overall financial position of the companies European operations, he added.

Cheshire Salt, based in Middlewich, produces about half of UK's pure salt used in applications ranging from food processing to chemicals production.

This will complement Tata Chemicals-owned Brunner Mond's experience in manufacturing bulk products, including soda ash and sodium bicarbonate.

General Motors is buying AmeriCorp, a company that offers subprime loans (loans to those with poor credit), for $3.5 billion dollars. GM says the move is necessary to expand financing to those with subprime credit scores. 40 percent of Americans hold these subprime ratings, which are defined as a score below 620 on a 300 to 850 scale.

“Clearly there’s an opportunity to bring more people into our showrooms and help them with finance,” said Chris Liddell, GM’s chief financial officer. GM will also be able to offer more leases to customers, a major selling point for upscale brands like Cadillac and Buick, whose customer base tends to lease vehicles more than mainstream brands. Currently 7 percent of GM’s sales come from leases, compared to an industry average of 21 percent. GM rebranded their GMAC finance unit as Ally, and they will continue to provide financing for the bulk of GM’s customers.

Subprime auto loans are a staple of the used car market, especially independent dealers who offer “financing for anybody” and the infamous “good credit, bad credit, no credit” types of used car lots. By definition this group is the highest risk for loans, due to a history of poor repayment, defaulting or other unscrupulous practices. With 40 percent of GM owned by the U.S government, you have to wonder how much integrity both parties have in extending these loans to people after a similar form of these loans nearly caused a global economic meltdown.

Hit the jump to read the official press release

[Source: GM and Yahoo News]

GM to Acquire AmeriCredit2010-07-22

Will form core of GM’s captive finance arm

Bolsters retail financing options for dealers and consumers, supporting GM North America sales growthDETROIT – To meet customer demand for leasing and non-prime financing for GM vehicles, General Motors and AmeriCredit Corp. (NYSE: ACF) today announced they have entered into a definitive agreement for GM to acquire AmeriCredit, one of the nation’s leading independent auto finance companies, in an all-cash transaction valued at approximately $3.5 billion.

“This acquisition supports our efforts to design, build and sell the world’s best vehicles by expanding the financing options we can offer to consumers who want to buy GM vehicles,” said GM Chairman and Chief Executive Officer, Ed Whitacre. “Adding AmeriCredit to our team will improve our competitiveness in auto financing offerings, and I am very pleased to have them on board.”

The acquisition establishes the core of a new GM captive financing arm that will enable GM to provide customers with a more complete range of financing options, while creating significant growth opportunities for both GM and AmeriCredit. Since GM and AmeriCredit launched a successful non-prime program in September 2009, GM’s non-prime penetration has increased significantly. Upon completion of the transaction, AmeriCredit intends to also re-enter the leasing business which will provide expanded leasing availability for all GM customers.

Direct ownership of AmeriCredit’s expertise will provide consistent availability of non-prime financing for GM customers throughout all economic cycles. While AmeriCredit already has relationships with approximately 4,000 GM dealers, this transaction will enhance dealer receptivity and improve sales penetration rates through coordinated GM branding and targeted customer marketing initiatives.

“With AmeriCredit providing us niche capabilities in leasing and non-prime financing, along with the continued strong support of Ally Financial and others for prime retail and dealer financing, we’ve set up a very competitive solution for our financing needs, which will be resilient through credit and business cycles,” said GM Vice Chairman and Chief Financial Officer, Chris Liddell.

AmeriCredit President and Chief Executive Officer Daniel Berce said, “We’re excited about joining the GM team. While we will be expanding our product set to more fully support GM, we’ll continue to offer our loan products to the more than 11,000 dealers across the country we serve today. Long term, this transaction will deliver benefits to our dealers, customers and employees.”

The highly regarded AmeriCredit management team will remain intact, which will assist in minimizing integration risk and maximizing opportunities between the two companies.

With total assets of approximately $10 billion, the acquisition of AmeriCredit poses minimal impact to GM’s balance sheet, and does not change GM’s objective of achieving strong investment grade status. Under GM ownership, AmeriCredit will maintain its own direct access to the capital markets for its financing requirements.

Under the terms of the agreement, which has been approved by both companies’ boards of directors, at closing, AmeriCredit shareholders will receive $24.50 in cash for each share of stock held as of the transaction closing date.

The transaction is expected to close by the end of the fourth quarter of 2010, pending certain closing conditions, including the approval of AmeriCredit shareholders.

GM and AmeriCredit will hold a joint conference call today for analysts and media at 10:00 a.m. Eastern Daylight Time. The toll-free number for U.S. callers is 800-764-4852. The dial-in number for international callers is 1-212-231-2917. When prompted, please ask to be connected to the General Motors conference call. Details on the call and information about how to access a replay of the call can be found on the GM or AmeriCredit websites at www.gm.com/corporate/investor_information/cal_events or www.americredit.com/investors/presentations.asp, respectively.

About General Motors:

General Motors, one of the world’s largest automakers, traces its roots back to 1908. With its global headquarters in Detroit, GM employs 205,000 people in every major region of the world and does business in some 157 countries.

GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM’s largest national market is the United States, followed by China, Brazil, Germany, the United Kingdom, Canada, and Italy. GM’s OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors acquired operations from General Motors Corporation on July 10, 2009, and references to prior periods in this and other press materials refer to operations of the old General Motors Corporation. More information on the new General Motors can be found at www.gm.com.

About AmeriCredit:

AmeriCredit Corp. is a leading independent automobile finance company that provides financing solutions indirectly through auto dealers across the United States. AmeriCredit has approximately 3,000 employees in the U.S. and Canada, 800,000 customers and $9 billion in auto receivables. The Company was founded in 1992 and is headquartered in Fort Worth, Texas. For more information, visit www.americredit.com.

Forward-Looking Statements:

GM and AmeriCredit Corp. advise that in this press release and in related comments by our management, our use of the words “expect,” “anticipate,” “possible,” “potential,” “target,” “believe,” “commit,” “intend,” “continue,” “may,” “would,” “could,” “should,” “project,” “projected,” “positioned” or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Among other items, such factors might include for GM: our ability to realize production efficiencies and to achieve reductions in costs as a result of our restructuring initiatives and labor modifications; our ability to maintain quality control over our vehicles and avoid material vehicle recalls; our ability to maintain adequate liquidity and financing sources and an appropriate level of debt, including as required to fund our planning significant investment in new technology; our ability to realize successful vehicle applications of new technology and our ability to comply with the continuing requirements related to U.S. and other government support. For AmeriCredit these factors include our ability to successfully operate in variable economic conditions, including fluctuating interest rate environment, changes in competitive, regulatory and legal environment, volatile wholesale vehicle values; our ability to service adverse changes in portfolio performance, our reliance on warehouse financing and capital markets; our ability to continue to securitize loans; our ability to obtain credit enhancement for securitization transactions on acceptable terms; our ability to manage the high degree of risk associated with subprime borrowers, and our exposure to litigation.

Our most recent annual reports on Form 10-K and quarterly reports on Form 10-Q provide information about these and other factors, which we may revise or supplement in future reports to the SEC.

Important additional information regarding the merger will be filed with the SEC:

In connection with the proposed merger, AmeriCredit plans to file a proxy statement with the Securities and Exchange Commission (the “SEC”). INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND THE PARTIES TO THE MERGER. Investors and security holders may obtain a free copy of the proxy statement (when available) and other relevant documents filed with the SEC from the SEC’s web site at http://www.sec.gov. Investors and security holders and other interested parties will also be able to obtain, free of charge, a copy of the proxy statement and other relevant documents (when available) by directing a request by mail or telephone to Investor Relations, AmeriCredit Corp., 801 Cherry Street, Suite 3500, Fort Worth, Texas 76102, telephone (800) 644-2297, or from AmeriCredit’s web site at www.AmeriCredit.com.

AmeriCredit and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from AmeriCredit’s shareholders with respect to the merger. Information about AmeriCredit’s directors and executive officers and their ownership of AmeriCredit’s common stock is set forth in AmeriCredit’s Proxy Statement on Schedule 14A filed on September 16, 2009. Shareholders and investors may obtain additional information regarding the interests of AmeriCredit and its directors and executive officers in the merger, which may be different than those of AmeriCredit’s shareholders generally, by reading the proxy statement and other relevant documents regarding the merger, which will be filed with the SEC.

GM and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from AmeriCredit’s shareholders with respect to the merger. Information about GM’s directors and executive officers is set forth in GM’s Form 10-K filed on April 7, 2010 and GM’s Form 10 Amendment No.1 filed May 17, 2010. These documents are available free of charge from the SEC’s web site at http://www.sec.gov, and by directing a request by mail or telephone to Investor Relations, General Motors Company, 303 Renaissance Center, Detroit, Michigan 48265-3000, telephone (313) 667-1669, or from GM’s web site at

In April, 2011, Tata Chemicals acquired a 25.1 per cent stake in an ammonia-urea fertiliser complex

in Gabon for $290 million in which Singapore-based agro-product processor and supplier Olam

International owns a 63 per cent stake and the Republic of Gabon holds 12 per cent. The company

acquired the stake as a strategic investor and is likely to invest another $170 million in the second

phase of expansion of the fertiliser complex.