Assignment Of Organizational change and development. submitted to: Ms.
priyanka chhibber submitted by: simranmeet kour Roll no: RT1903b44 Section: T1903
The phrase mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity. An acquisition is the purchase of one company by another company. Consolidation is when two companies combine together to form a new company altogether. An acquisition may be private or public, depending on whether the acquiree or merging company is or isn't listed in public markets. An acquisition may be friendly or hostile. Whether a purchase is perceived as a friendly or hostile depends on how it is communicated to and received by the target company's board of directors, employees and shareholders. It is quite normal for M&A deal communications to take place in a somnn, called 'confidentiality bubble' whereby information flows are restricted due to confidentiality agreements (Harwood, 2005). In the case of a friendly transaction, the companies cooperate in negotiations; in the case of a hostile deal, the takeover target is unwilling to be bought or the target's board has no prior knowledge of the offer. Hostile acquisitions can, and often do, turn friendly at the end, as the acquiror secures the endorsement of the transaction from the board of the acquiree company. This usually requires an improvement in the terms of the offer. Acquisition usually refers to a purchase of a smaller firm by a larger one. Sometimes, however, a smaller firm will acquire management control of a larger or longer established company and keep its name for the combined entity. This is known as a reverse takeover. Another type of acquisition is reverse merger, a deal that enables a private company to get publicly listed in a short time period. A reverse merger occurs when a private company that has strong prospects and is eager to raise financing buys a publicly listed shell company, usually one with no business and limited assets. Achieving acquisition success has proven to be very difficult, while various studies have shown that 50% of acquisitions were unsuccessful.
Distinction between mergers and acquisitions
Although often used synonymously, the terms merger and acquisition mean slightly different things. When one company takes over another and clearly establishes itself as the new owner, the purchase is called an acquisition. From a legal point of view, the target company ceases to exist, the buyer "swallows" the business and the buyer's stock continues to be traded. In the pure sense of the term, a merger happens when two firms agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a "merger of equals". The firms are often of about the same size. Both companies' stocks are surrendered and new company stock is issued in its place. For example, in the 1999 merger of Glaxo Wellcome and SmithKline Beecham, both firms ceased to exist when they merged, and a new company, GlaxoSmithKline, was created. In practice, however, actual mergers of equals don't happen very often. Usually, one company will buy another and, as part of the deal's terms, simply allow the acquired firm to proclaim that the action is a merger of equals, even if it is technically an acquisition. Being bought out often carries negative connotations, therefore, by describing the deal euphemistically as a merger, deal makers and top managers try to make the takeover more palatable. An example of this would be the takeover of Chrysler by Daimler-Benz in 1999 which was widely referred to as a merger at the time. A purchase deal will also be called a merger when both CEOs agree that joining together is in the best interest of both of their companies. But when the deal is unfriendly (that is, when the target company does not want to be purchased) it is always regarded as an acquisition.
Many other more modern change models are actually based on the Kurt Lewin model. Freezing. This first stage is about preparing ourselves. Change. A lot has changed since the theory was originally presented in 1947. Let's look at each of these.Kurt Lewin Change Management Model
Kurt Lewin emigrated from Germany to America during the 1930's. before the change (and ideally creating a situation in which we want the change). But be aware that the theory has been criticised for being too simplistic. and getting ready to move away from our current comfort zone. three stages. Change.and perhaps a little more to whet your appetite! So.
Unfreeze. but the Kurt Lewin model is still extremely relevant. It involves getting to a point of understanding that change is necessary. Lewin is recognised as the "founder of social psychology" which immediately points to his interest in the human aspect of change.
Kurt Lewin proposed a three stage theory of change commonly referred to as Unfreeze. Unfreezing. Change. or others. I'm going to head down a middle road and give you just enough information to make you dangerous. This stage is about getting ready to change.
Stage 1: Unfreezing
The Unfreezing stage is probably one of the more important stages to understand in the world of change we live in today.. Freeze (or Refreeze). It is possible to take these stages to quite complicated levels but I don't believe this is necessary to be able to work with the theory..
The Kurt Lewin Force Field Analysis is a useful way to understand this process and there are plenty of ideas of how this can be done. or an entire business towards motivation for change.The more we feel that change is necessary. but rather a process.and if we feel pushed to change we're likely to get grumpy and dig in our heels. but now you find yourself on the edge looking down. There's much lower motivation to make a change and get on with it. Imagine bungey jumping or parachuting. the more motivated we are to make the change. then there's low motivation to change . If the factors for change outweigh the factorsagainst change we'll make the change. If there's no deadline. of course! If you understand procrastination (like I do!) then you'd recognise that the closer the deadline. That said this stage is often the hardest as people are unsure or even fearful. or a department. Scary stuff! But when you do it you may learn a lot about yourself. This second stage occurs as we make the changes that are needed. Transition is the inner movement or journey we make in reaction to a change. You may have convinced yourself that there is a great benefit for you to make the jump. People are 'unfrozen' and moving towards a new way of being. Right? Yes. the more likely you are to snap into action and actually get the job started! With the deadline comes some sort of reward or punishment linked to the job. Unfreezing and getting motivated for the change is all about weighing up the 'pro's' and 'con's' and deciding if the 'pro's' outnumber the 'con's' before you take any action.
. the more urgent it is.
Stage 2: Change .
Force Field Analysis is a fancy way of saying that there are lots of different factors (forces) for and against making change that we need to be aware of (analysis). This first 'Unfreezing' stage involves moving ourselves. then the urge to change is lower than the need to change. If not. This is the basis of what Kurt Lewin called the Force Field Analysis. He called that process a transition.or Transition
Kurt Lewin was aware that change is not an event.
. It's also really useful to keep communicating a clear picture of the desired change and the benefits to people so they don't lose sight of where they are heading. Using role models and allowing people to develop their own solutions also help to make the changes.This is not an easy time as people are learning about the changes and need to be given time to understand and work with them. coaching. and expecting mistakes as part of the process. Support is really important here and can be in the form of training.
group life soon returns to the previous level. Kurt Lewin. Permanency of the new level. This way 'Unfreezing' for the next change might be easier. This can take time. in the current favourite flavour. after a "shot in the arm". we should think about this final stage as being more flexible. As the name suggests this stage is about establishing stability once the changes have been made. So popular thought has moved away from the concept of freezing. 5-41 (I added the emphasis) Lewin's concern is about reinforcing the change and ensuring that the desired change is accepted and maintained into the future. And it's just this that's drawn criticism to the Kurt Lewin model. The changes are accepted and become the new norm. Human Relations. This rigidity of freezing does not fit with modern thinking about change being a continuous.Stage 3: Freezing (or Refreezing)
Kurt Lewin refers to this stage as freezing although a lot of people refer to it as 'refreezing'. It's often at this point that people laugh and tell me that practically there is never time for this 'freezing' stage. This indicates that it does not suffice to define the objective of planned change in group performance as the reaching of a different level. But it might help to get in touch with what Kurt Lewin was actually saying. or permanency for a desired period. There is just no time to settle into comfortable routines. sometimes chaotic process in which great flexibility is demanded. should be included in the objective. Without this people tend to go back to doing what they are used
. rather than a rigid frozen block. pp. Given today's pace of change this is a reasonable criticism. In todays world of change the next new change could happen in weeks or less. Volume 1. In 1947 he wrote: A change towards a higher level of group performance is frequently short-lived. "Frontiers of Group Dynamics". Instead. something like a milkshake or soft serv icecream. People form new relationships and become comfortable with their routines.
More modern models of change. Establishing stability only happens when the new changes are locked-in.
. at a personal level can give us insight and help us better understand how we deal with change. such as the ADKAR model. and an end. I've also read this final step of freezing referred to as the lock-in effect. are more explicit about this step and include Reinforcement as one of their phases. While this is useful when thinking about the process of change the reality is that this journey doesn't have an end.to doing. middle. as the Lewin change management model might seem to suggest. So be careful about thinking that a change process has a definite end.supporting the desired change to make sure it continues and is not lost. Applying the concepts of Unfreezing. Of course each stage can be expanded to aid better understanding of the process. This is probably what Kurt Lewin meant by freezing . In what ways do you think this model might be useful for you? I've found the Kurt Lewin model useful to frame a process of change for people that is quite easy to understand. and especially the Force Field Analysis. Thinking about change as a journey might make you think that a journey has a beginning . But no end. Lots of rest stops maybe! Some opportunities for settling down for a while.
Individual needs and values 11. The model focuses on providing a guide for both organizational diagnosis and planned. suggests linkages that hypothesize how performance is affected by internal and external factors. Task and individual skills 10. The model also distinguishes between transformational and transactional organizational dynamics in organizations. Structure 6.The causal model links what could be understood from practice to what is known from research and theory. The model not only discusses how different dimensions link with each other but also discusses how external environment affects the different dimensions in organization. Work unit climate 9. Organizational culture 5. Motivation 12. Leadership 4. It provides a framework to assess organizational and environmental dimensions that are keys to successful change and it demonstrates how these dimensions should be linked causally to achieve a change in performance.
Outline of the Approach:
The model revolves around 12 organizational dimensions:
1. Systems 8. one that clearly shows cause-and-effect relationships. or the Burke & Litwin Model. External environment 2.
. Mission and strategy 3. Management practices 7. managed organization change.A Causal Model of Organizational Performance & Change (Burke & Litwin Model)
A Causal Model of Organizational Performance and Change. Individual and organizational performance.
NOVELIS ACQUISITION: CREATING AN ALUMINIUM GLOBAL GIANT
ABSTRACT HINDALCO . Hindalco Industries Ltd. In this chain Indian aluminium giant Hindalco acquired Atlanta based company Novelis Inc. to gain sheet mills that supply can makers and car companies. The transaction makes Hindalco the world's largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia.. as well as being India's leading copper producer. Followings are the main issues to be discussed for critical review of this case: What is the strategic rational for this acquisition? Were the valuation for this acquisition was correct? What are financial challenges for this Acquisition? What is the future outlook of this acquisition?2
1.The various merger and acquisitions that have occurred in the organization in steel and aluminum industry: HINDALCO . The case study attempts to analyze the financial and strategic implications of this acquisition for the shareholders of HINDALCO. Post 1991 era witnessed growing appetite for takeovers by Indian corporate also
. the acquisition of Novelis takes Hindalco onto the global stage as the leader in downstream aluminium rolled products. INTRODUCTION
Mergers and Acquisitions have been the part of inorganic growth strategy of corporate worldwide. Strategically. a world leader in aluminium rolling and flat-rolled aluminium products. acquired Novelis Inc.NOVELIS ACQUISITION: CREATING AN ALUMINIUM GLOBAL GIANT Last decade witnessed growing appetite for takeovers by Indian corporate across the globe as a part of their inorganic growth strategy. The case explains the acquisition deal in detail and highlights the benefits of the deal for both the companies.
the key consuming industries are likely to lead the way. In fact. This series of acquisitions in metal industry was initiated by acquisition of Arcelor by Mittal followed by Corus by Tata’s. This is exactly what Hindalco manufactures. Indian aluminium giant Hindalco extended this process by acquiring Atlanta based company Novelis Inc. an integrated player. as well as being India's leading copper producer. Hindalco has completed this acquisition through its wholly-owned subsidiary AV Metals Inc and has acquired 75. a world leader in aluminium rolling and flat-rolled aluminium products. The deal made Hindalco the world's largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. the aluminium industry is sensitive to fluctuations in performance of the economy. This makes the marriage a perfect fit. Novelis. it commands a 19% global market share in the flat rolled products segment. which has been and is expected to continue to register double-digit growth rates in aluminium consumption in the medium-term. acquired Novelis Inc. the acquisition of Novelis takes Hindalco onto the global stage as the leader in downstream aluminium rolled products. newer packaging applications and increased usage in automobiles is expected to keep the demand growth for aluminium over 5% in the long-term. Hindalco Industries Ltd. Strategically. representing 100 percent of the issued and outstanding common shares AV Metals Inc transferred the common shares of Novelis to its wholly-owned subsidiary AV Aluminium Inc. extruding and foil making capacities as well.
. The acquisition of Novelis by Hindalco bodes well for both the entities. 2. With the government focusing towards attaining GDP growth rates above 8%. Asia will continue to be the high consumption growth area led by China. focuses largely on manufacturing alumina and primary aluminium. making it a leader. Currently Hindalco. Power. INDUSTRY
Globally. to gain sheet mills that supply can makers and car companies. Novelis processes around 3 million tonnes of aluminium a year and has sales centers all over the world.415 common shares of Novelis. processes primary aluminium to sell downstream high value added products.. Hindalco Industries Ltd has completed its acquisition of Novelis Inc under an agreement in which Novelis will operate as a subsidiary of Hindalco. infrastructure and transportation account for almost 3/4th of domestic aluminium consumption.across the globe as a part of their growth strategy. It has downstream rolling. With key consuming industries forming part of the domestic core sector. but they are far from global scale.
there are only three main primary metal producers in the sector. producers are moving downstream to negate the higher volatility. Bayer-Hall-Heroult technology used by all producers. India is a net exporter of alumina and aluminium metal at present. volatility in financials could increase. with greater linkage to international prices. Bharat Aluminium (Balco) and Madras Aluminium (Malco) the erstwhile PSUs. Lowering of duties reduces the net tariff protection for domestic aluminium producers. This sector is going through a consolidation phase and existing producers are in the process of enhancing their production capacity so that a demand supply gap expected in future is bridged. The demand of aluminium is expected to grow by about 9 percent per annum from present consumption levels. With reduction in import duties. Consequently. Highly concentrated industry with only five primary plants in the country. Moreover. now merged with Hindalco. The per capita consumption of aluminium in India is only 0. However. [Exhibits 8-9] 3.which could positively impact aluminium consumption. INDUSTRY
The Indian aluminium sector is characterized by large integrated players like Hindalco and National Aluminium Company (Nalco). 19kg. in Japan and 10 kg. One reason of low consumption in the country could be that consumption pattern of aluminium in India is vastly different from that of developed countries. The other producers of primary aluminium include Indian Aluminium (Indal). Controlled by two private groups and one public sector unit. In order to develop a guideline for energy management policy for the plants comprising the aluminium industry. domestic realization of aluminium majors. which have been acquired by Sterlite Industries. as the buffer on international prices is reduced. Features of Indian Aluminium Industry. coal and furnace oil are primary energy inputs. Aluminium imports are currently subject to a 3 customs duty of 5% and an additional surcharge of 3% of the customs duty. Domestic demand growth is estimated to average in the region of over 8% over the longer-term. is likely to be under pressure. in Europe. it was decided to undertake a questionnaire survey that was followed up by plant visits. namely Hindalco and Nalco.
. However. The customs duty has been reduced in a series of steps from 15% in 2003 to 5% in January 2007. in USA. Even the World’s average per capita consumption is about 10 times of that in India.5 kg as against 25 kg. Electricity.
in 1962 and has today grown to become the country's largest integrated aluminium producer and ranks among the top quartile of low cost producers in the world. Achievements in energy conservation are highlighted in the Annual Report of the company. Hindalco commenced its operations in 1962 with an aluminium facility at Renukoot in Uttar Pradesh. High cost of technology is the main barrier in achieving high energy efficiency
4. government policies were rated as conducive to energy management. The aluminium division's product range includes alumina chemicals. wire rods. Hindalco's copper division is situated in Dahej in the Bharuch district of Gujarat.1 HINDALCO INDUSTRIES LIMITED Hindalco Industries Limited. Hindalco commissioned its aluminium facility at Renukoot in eastern U. Energy targets are based on best energy figures achieved in their sector / region and by the plant itself in the past. Established in 1958.P. extrusions. a flagship company of the Aditya Birla Group. Energy management is a critical focus in all the plants. All plants have their own captive power units for cheaper and un-interrupted power Supply. 63 per cent
. Two plants have declared formal energy policy. billets. It enjoys a domestic market share of 42 per cent in primary aluminium. is structured into two strategic businesses aluminium and copper with annual revenue of US $14 billion and a market capitalization in excess of US $ 23 billion. primary aluminium ingots. Generally. Task Force’ formed by BEE in this sector to work as catalyst in promoting energy efficiency. Birla Copper.Energy cost is 40% of manufacturing cost for metal and 30% for rolled products. rolled products. foils and alloy wheels. COMPANY OVERVIEW ( profile and company structure):
4.Plants have set internal target of 1 – 2% reduction in specific energy consumption in the next 5 – 8 years. Each plant has an Energy Management Cell4.
formed in January 2005.9B. The company recycles more than 35 billion used beverage cans annually. Rexam.15% to 2. with a new velocity. namely Aura for alloy wheels. Crown Cork & Seal. Novelis is a new company.96%. With industry-leading assets and technology. sulphuric acid. Our customers include major brands such as Agfa -Gevaert. construction and printing. Coca-Cola. general and administrative costs from 4. packaging. di-ammonium phosphate. Karnataka and Taloja. silver and platinum group metal mix. and the No. Hindalco Industries Limited has a 51. Novelis has a diversified product portfolio. General Motors. the company has been able to reduce the percentage of sales devoted to selling.2B. Hindalco Industries Ltd. Most impressively. draws on a rich 90-year history in the aluminium rolled product market place .2 COMPANY OVERVIEW: NOVELIS Novelis is the world leader in aluminium rolling. 44 per cent in foils and 31 per cent in wheels. This was a driver that led to a bottom line growth from 15. 1 rolled products producer in Europe.0% shareholding in Aditya Birla Minerals which has mining and exploration activities focused in Australia. Anheuser-Busch. It was born in early 2005 as a result of a ‘forced’ spin-off from its parent. The copper plant produces copper cathodes. continuous cast copper rods and precious metals like gold. Tetra Pak. Pactiv. the company produces the highest-quality aluminium sheet and foil products for customers in high -value markets including automotive.in rolled products. Ball. phosphoric acid. Daching Holdings. ThyssenKrupp and others. 2 producer in North America. Hindalco has launched several brands in recent years. They have been recognized by the Government of India's Department of Scientific and Industrial Research (DSIR). Freshwrapp for kitchen foil and ever last for roofing sheets. The company is No. Novelis is the world leader in the recycling of used aluminium beverage cans. But Novelis is also a spin-off from Alcan and. producing an estimated 19 percent of the world's flat-rolled aluminium products.8B to 26. as such. Novelis represents a unique combination of the new and the5 old. Lotte Aluminium. the $
. a new philosophy and a new attitude. 20 per cent in extrusions. South America and Asia. Alcan. other phosphatic fertilisers and phospho-gypsum are also produced at this plant. Ford. The company has two R&D centres at Belgaum. Ryerson Tull. has been able to grow revenues from 121. Novelis was always a problem child.2B to 193. transportation. [Exhibit 2-7] 4. Maharashtra. which serves to the different set of industries vis-à-vis it has a very strong geographical presences in four continents. [Exhibit 1] Year over year. Kodak.
33 billion (most of it high cost). processes it into rolled products like stock for soft drink cans.23. and sells it to customers such as Coke and Ford. A few months after Novelis signed those contracts. It is now the world’s leading producer of aluminium-rolled products with a 19 per cent global market share. Novelis’s former CFO Geoffrey P. To these four customers. etc.23:1.9 billion on a capital base of less than $500 million. More o all that later.6-billion aluminium giant and Canada-based Alcan. But the management took a wrong call on aluminium prices.. First. automotive parts.) There are many more reasons for the distress in Novelis. In a bid to win more business from soft drink manufacturers.The situation is worse now. Alcan cast out its rolled products business to form Novelis. former controller Jo-Ann Longworth and the finance team didn’t quantify these losses. It buys primary aluminium. and rolling mills to turn the raw metal into products such as stock for Pepsi and Coke cans and automotive parts. When that didn’t help much. Sturgell in August 2006. which increased Alcan’s can stock. But the marriage produced an unwanted child — Novelis. That was just the beginning of its troubles. These four account for 20 per cent of Novelis’s $9-billion revenues. On a net worth of $322 million. More recent expansions were made through both acquisitions and modernization of existing mills. it replaced its CFO and controller (in December 2005). In 2003. the unwanted child stumbled into another crisis. Novelis was forced to sell its products at prices that were lower than raw material costs. Novelis has a simple business model. But in the spin-off process. But the management’s wrong judgement led to losses of $350 million (in 2006). it replaced CEO Brian W. aluminium prices shot up 39 per cent (between 30 September 2005 and 2006). it made some losses too. But the US and European anti-trust proceedings ruled that the rolled products business of either Alcan or Pechiney had to be divested from the merged entity. For long. The board stepped in. Batt. Both Alcan and Pechiney had bauxite mines. enter the suitor. facilities to produce primary aluminium. it promised four customers not to increase product prices even if raw material aluminium prices went up beyond a point. Alcan won a hostile offer to wed French aluminium company Pechiney. sheet and foil rolling
. Now. After the complicated spin-off from Alcan — this involved extensive operations in over 35 plants in 11 countries and four continents — the finance team also struggled to file quarterly and annual results on time. Novelis ended up inheriting a debt mountain of almost $2. Though it marginally reduced debt. (It is still looking for a full-time CEO. Novelis has a debt of $2. Many of the numbers it managed to file on time were wrong and were later re-stated.Soon. That’s a debt-equity ratio of 7.
Canada. respectively. In 1902. operates the world’s largest aluminum rolling mill in terms of capacity. Pindamonhangaba. smelting.the hot mill began operations and is now a major producer of can stock and industrial sheet. Saguenay Works.a joint venture. Limited. Over the years Alcan constructed a number of mills. Brazil (1977) – the only South American plant producing beverage can body and end stock. United States (1963) . 2005. In 2005. including several that are among the largest aluminum rolling operations in each of the geographic regions in which Novelis operates: Oswego. 41% and 39%.capabilities. Novelis inherited its assets. The company had 36 operating facilities in 11 countries as of December 31. Norf. When Alcoa divested most of its interests outside the United States in 1928. 2004 and 2003. Germany (1967) . Novelis was spun off to carry on most of the aluminum rolled products businesses operated by Alcan with an approach to business that is more focused on helping our customers perform and on transforming new ideas into practical product solutions. know-how and structure from Alcan. But in the process
. owned at 50%. In the following years Alcan expanded globally. 40%.000 employees in 63 countries. the Canadian subsidiary of the Pittsburgh Reduction Company (later re-named Alcoa) was first chartered as the Northern Aluminum Company. The tables below present Net sales and Long-lived assets by geographical area (in millions). of our total Net sales were to our ten largest customers. [Exhibit 11]
5 position after merger and acquisition:
Organic and inorganic both strategies have worked for companies worldwide. Net sales are attributed to geographical areas based on the origin of the sale. Long-lived assets are attributed to geographical areas based on asset location. building or acquiring hydroelectric power. Canada (1971) – the largest continuous caster in the world in terms of capacity. with an 84-inch hot mill and three finishing mills. The first Alcan rolling operation began in 1916 6 in Toronto. packaging and fabricated product facilities run by approximately 88. Alcan was formed as a separate company from Alcoa to assume control of most of these interests.
As a part of its inorganic growth strategy of global expansion.4 billion and net loss of US $170 million in nine months during 2006. Novelis is expecting the full year loss to be US $263 million in 2006. Hindalco has a 60% share in the currently small but potentially high-growth Indian market for rolled products. operating in 11 countries $8. which values Novelis at enterprise value of approximately US $6. including approximately US $2. This merger of Novelis into Hindalco will establish a global integrated aluminium producer with low-cost alumina and aluminium production facilities combined with high -end aluminium rolled product capabilities. on account of low contract prices. Some of these contracts are expected to continue for next Years also. the company reported net sales of US
.0 billion.4 billion of debt. Novelis will work as a forward integration for Hindalco as the company is expected to ship primary aluminium to Novelis for downstream value addition.of global expansions inorganic growth strategies has always been the first preference for the companies globally. all the sales contracts will get expired and p r o f i t a b i l i t y will increase substantially from then onwards. however the company is expecting to be in black with US $68 million profit in 2007. After merger Hindalco will emerge as the biggest rolled aluminium products maker and fifth-largest integrated aluminium manufacturer in the world.500 employees. As Novelis is the global leader in aluminium rolled products and aluminium can recycling. By January 1. Novelis is a globally positioned organization.4 billion and net profit of US $90 million. 2010. In 2005. with approximately 12. The company reported net sales of US $7. Hindalco's position as one of the lowest cost producers of primary aluminium in the world is leverageable into becoming a globally strong player. The7 total free cash flow is expected to be US $175 million in 2006. The following points highlight the important points about this acquisition of Hindalco for this acquisition: The acquisition of Novelis by Hindalco was in an all-cash transaction. with a global market share of about 19%. The Novelis acquisition will give the company immediate scale and strong a global footprint.
we expect the aluminium prices to be softening in long term and this would be positive for Novelis.23:1. the Tatas are paying only a third of the acquisition price. Considering these factors. Hindalco’s profitability is expected to remain under pressure and this will bounce back in 2009-10. CRISIL has placed its outstanding long-term rating of ‘AAA/Stable’ on Hindalco Industries Limited (Hindalco).1 billion. This was possible because Corus had relatively low debt on its balance sheet and was able to borrow more. it can’t borrow any more. Only $4. The profitability will be accretive only in 2010-11. 25. To buy the $3. on ‘Rating Watch with Negative Implications’.
6. So. The debt component of Novelis stood at US $2. This will put tremendous pressure on profitability due to high interest burden.85 billion (of the balance. $300 million is being raised as debt from group companies and $450 million is being mobilised from its cash reserves).4 billion and additional US $2. Novelis has a rolled product capacity of approximately 3 million tonne while Hindalco at the moment is not having any surplus capacity of primary aluminium.000 crore and as a result debt and interest burden of the company will increase further. but this will take a minimum 3-4 years to all the capacities to come into operation. Hindalco’s existing expansion will cost Rs. But that is not the case with Novelis.1 billion of this is being raised by the Tatas. Effectively. the Birlas were unable to do a leverage buyout. The short term rating of ‘P1+’ has been reaffirmed. With a debt-equity ratio of 7. This would lead to higher interest rate for the company. The remaining $8 billion will be raised (as debt) and repaid on the strength of the Corus balance sheet. Hindalco’s greenfield expansion will give it primary aluminium capacity of approximately 1 million tonne. Hindalco is now borrowing almost $2. FUNDING STRUCTURE FOR THE DEAL
The funding structure of this deal is remarkably different from the leveraged buyout model that Tata Steel used to fund the Corus buy. However.8 billion will be taken by Hindalco to finance the deal. That is almost a third of the Rs
. The Tatas are to buy 100 per cent of Corus’ equity for $12.6 billion worth of Novelis’s equity. Novelis profitability is adversely related to aluminium prices and higher aluminium prices on LME in near future can’t be ruled out.
'' The combination of Hindalco and Novelis establishes an integrated producer with low-cost alumina and aluminium facilities combined with high-end rolling capabilities and a global footprint. construction and industrial. It has presence in 11 countries and provides sheets and foils to automotive and transportation. entry into high—end downstream market and enhancing global presence. Hindalco will have to refinance these borrowings. Hindalco’s rationale for the acquisition is increasing scale of operation. It has presence in 11 countries and provides sheets and foils to automotive and transportation. (It has reported a net profit of Rs 1.) The second part of the deal is the $2. and printing markets. though they will be repaid with Novelis’s cash flows
Problems in merger and acquisition:
The case study attempts to analyze the financial and strategic implications of this acquisition for the shareholders of hindalco. The case explains the acquisition deal in detail and highlights the benefits of the deal for both the companies. The case discusses the acquisition of US-Canadian aluminium company Novelis by India-based Hindalco Industries Limited (Hindalco). Hindalco will be able to ship primary aluminium from India and make value-added products.500 crore net profit Hindalco may post in 2006-07. a part of Aditya 8 Vikram Birla Group of Companies. Novelis is the global leader (in terms of volume) in rolled product with annual production capacity of 2.8 million tonnes and a market share of 19 per cent.1 STRATEGIC RATIONALE FOR ACQUISITION( reason for success of the merger):
This acquisition was a very good strategic move from Hindalco.4-billion debt on Novelis’s balance sheet. beverage
. Novelis is the global leader (in terms of volumes) in rolled products with annual production capacity of 2.2. entry into high—end downstream market and enhancing global presence.8 million tonnes and a market share of 19 per cent. Hindalco’s rationale for the acquisition is increasing scale of operation. Followings are the main issues to be discussed for critical review of this case: What is strategic rationale for this acquisition? Were the valuation for this Acquisition was correct? What are financial Challenges for this Acquisition? What is future outlook for this acquisition?
7.843 crore for the first three quarters of this year. in May 2007. beverage and food packaging.
so considering the time required and replacement value. textiles and financial services. while Hindalco has 220.5 million metric tonne by 2012 to become one of the world's five largest producers. the company will get a strong global footprint. It would have taken a minimum 8-10 years to Hindalco for building these facilities. cement.9 The deal will give Hindalco a strong presence in recycling of aluminium business. Hindalco had developed long-term strategies for expanding its operations globally and this acquisition was a part of it. which also has interests in telecommunications. Europe. construction and industrial. Hindalco aimed to achieve its long-held ambition of becoming the world's leading producer of aluminium flat rolled products. ``This acquisition gives Hindalco access to higher-end products but also to superior technology. the replacement value of the Novelis is US $12 billion. metals. and Coca-Cola Co. Tata Steel Ltd. As per aluminium characteristic. is the world's 13th-largest aluminium maker.. As per company details. The company. are seeking acquisitions overseas to add production capacity and find markets for their products.000 tonne . the joint entity will become insulated from the fluctuation of LME Aluminium prices.rolled products. Novelis was the leader in producing rolled products in the Asia-Pacific. Indian companies. Novelis has capacity to produce 3 million tonne of flat. if Hindalco takes organically route. Acquiring Novelis will provide Aditya Birla Group's Hindalco with access to customers such as General Motors Corp. Hindalco's management issued press releases claiming that the acquisition would further internationalize its operations and increase the company's global presence. After the deal was signed for the acquisition of Novelis. the deal is worth
. fueled by accelerating domestic growth. spent US $12 billion last month to buy U.'' Hindalco plans to triple aluminium output to 1. and printing markets. aluminium is infinitely recyclable and recycling it requires only 5% of the energy needed to produce primary aluminium. and South America and was the second largest company in North America in aluminium recycling. metal solidification and in rolling technologies worldwide.K.and food packaging. Novelis has a very strong technology for value added products and its latest technology ‘Novelis Fusion’ is very unique one. steelmaker Corus Group Plc. By acquiring Novelis. After full integration. The benefits from this acquisition can be discussed under the following points: Post acquisitions.
why is Hindalco paying US $44. Any change in the raw material price is directly passed on to the customers who range from coca cola to automobile companies like aston martin. The imediate effect of the merger is that Hindalco would achieve its target of doubling its turnover to $ 20 billion three years in advance.
7. has invested heavily in developing various production technology. Fourty percent of the products are rolled products and Novelis is in leader in rolling business with a market share of 20%.93 a share for a
. Even in 2005. One of such technology is a fusion technology that increases the formability of aluminium.0 mt compared to Hindalco’s existing primary capacity of 500 kt. Financial numbers show that novelis is not a good choice by Hindalco at least at the price that they paid for the company. Novelis fits well in the long term strategy of Hindalco. Novelis being market leader in the rolling business.So. when Novelis had made a US $90-million net profit. the group will remain a downstream aluminium producer. All raw aluminium is processed so that it can be used in products.for Hindalco. This means that it can be better used formed into the design requirement by the car companies. Analysts believe the Birlas are paying too high a price for a company that incurred a loss of US $170 million for the nine months ended 30 September 2006. According to Standard and Poors it would take 10 years and $ 12 billion to build the 29 plants that Novelis has with capacity of close to 3 million tonnes. In its latest guidance. this not the case with rolling business which usually has a constant margin. The current revenue of hindalco is very much dependent on the aluminium prices and when the prices are high they make a larger margin. The purchase structurally shifts Hindalco from an upstream aluminium producer to a downstream producer. Even with Hindalco’s expansion plans to take primary production to 1. The takeover of Novelis provides Hindalco with access to the leading downstream aluminium player in western markets. its share prices never crossed US $30. Hindalco approached Novelis because they believed that Novelis can give them some business advantage.5 mt by 2011. For Hindalco to develop such technology will take a lot of time. Novelis is not a dying company looking for a savior. Novelis shareholders are required to approve the deal which the companies expect to be completed by 2007. the Novelis management has indicated a loss of US $240 million 285 million for the whole of 2006. This is reflected in Novelis’ downstream product capacity of 3.2 success of the merger:
The big concern is Novelis’s valuation.
With capacity of nearly 3. The deal will create value only after the Hindalco’s expansion completion. Based on Novelis’ guidance and consensus forecasts for 2007.loss-making company? In its guidance.93/share and assuming US $2. we estimate the acquisition will destroy value by INR60/share. the price Hindalco paid translates to a market capitalization/profit before tax (PBT) multiple of 36 on Novelis’s 2007 forecast. [Exhibit 13] Hindalco has long held an ambition to become a leading (top 10) player across its 2 key business segments. versus its current upstream focus. The acquisition will more than triple Hindalco’s revenues. Assuming synergies are minimal and based on Novelis’ guidance for 2007. we calculate that Hindalco’s EPS will be diluted by 18%. The concern is the severity of the earnings and value dilution that will result. aluminium and copper. That appears to be high. and that could be adversely affected by changes in the business or financial condition of these significant customers or by the loss of their business. Some of the customers of Novelis are significant to the company’s revenues. Novelis is nearly 50% larger than Hindalco’s current market capitalization. The acquisition of Novelis should achieve part of this goal by 10 propelling Hindalco to the world’s leading producer of aluminium flat rolled products. Perhaps the greatest issue with the Novelis acquisition is Hindalco’s balance sheet position post acquisition. Having already committed to significant expansion projects.7x EBIT or 53. we estimate Hindalco will need to improve annual free cash flow by 35% to US $540m for the acquisition to be value (NPV) neutral. but will increase the debt and erode its profitability. Going by the optimistic end of the guidance. with its Net Debt / EBITDA ratio reaching over
7. To put it another way. 20.4x PE. At Novelis long term annual free cash flow target of US $400m (using a real WACC of 9%). Novelis will push Hindalco’s high gearing levels even further. We calculate that Hindalco’s gearing (ND/E) will reach 236%. Novelis takes Hindalco down the value chain to become a downstream aluminium producer. At a total enterprise value of US $ 6 billion.0 mt of flat rolled aluminium products. Besides the company will move from high margin metal business to low—margin downstream products business.4x EBITDA. Novelis is not coming cheaply. At a price of US $44.3 FINANCIAL CHALLENGES FOR THE ACQUISITION
The acquisition will expose Hindalco to weaker balance sheet. we estimate that Hindalco is paying 11. and due to its highly leveraged position.4 bn of debt. expansion plans may get affected.
. the Novelis management has indicated a pre-tax profit of US $35 million-100 million for 2007.
23 million tonnes of capacity will
.59. Though the Hindalco-Novelis acquisition had many synergies. the companies are expanding alumina capacities and setting up captive power plants.5% of company’s total net sales in that year). Domestic alumina capacity is set to increase by 9.81800 million and are spread across 35 projects.000 tonnes to one lakh tonne. are under implementation. If all the projects are successfully implemented.5 million tonnes when all the outstanding projects are completed. They opined that the acquisition deal was over-valued as the valuation was done on Novelis' financials for the year 2005 and not on the financials of 2006 in which the company had reported losses. Hindalco and Vedanta group have drawn up plans to increase Capacities. Hindalco has undertaken aggressive plans to increase its capacities through capacity expansion as well as by setting up greenfield plants. In 2007—0 itself about 1. All the three major companies Nalco. Adverse changes in currency exchange rates could negatively affect the financial results and the competitiveness of company’s aluminium rolled products relative to other materials. about 1. smelting capacity will increase by about 10 lakh tonnes.4 FUTURE OUTLOOK
High prices and buoyant demand outlook in the domestic as well as international markets prompted aluminium companies to undertake huge expansion plans. At the end of January 2007. aluminium smelting capacity will increase from 11. Huge quantity of aluminium will come into the market in the coming years. 11
7. some analysts raised the issue of valuation of the deal as Novelis was not a profitmaking company and had a debt of US $ 2. Most of the major projects. The end-use markets for certain of Novelis products are highly competitive and customers are willing to accept substitutes for the company products. Along with smelting capacities. Novelis profitability could be adversely affected by the inability to pass through metal price increases due to metal price ceilings in certain of the company’s sales contracts.8 lakh tonnes to 18 lakh tonnes. with Rexam Plc and its affiliates representing approximately 12. Of this. When Hindalco completes all its project.4 billion.6 lakh tonnes will come on stream in 2007—08 and five lakh tonnes each in 2009 and 2010. investment in hand in the aluminium anti aluminium products sector amounted to Rs. The Company’s agreement not to compete with Alcan in certain end-use markets may hinder Novelis ability to take advantage of new business opportunities. amounting to over 60 per cent of the aggregate investment in value terms.(The company’s ten largest customers accounted for approximately 40% of total net sales in 2005. Hindalco increased its capacity at Hirakud plant by 35.
for it to build infrastructure that can match Novelis is very difficult.23 million tonnes. Currently Hindalco's production is tied up with clients. but also leave surplus alumina to be exported to lucrative markets like China. Also we need to keep in mind that Hindalco is a very aggressively growing company. But after 3-4 years it would start the operation of new plants. Then it can source excess capacity to the Novelis plants located in south east asian countries. Also Novelis has similar contracts with its suppliers.come on stream.
. catapulting aggregate capacity to 4. Large alumina capacities will not only feed captive aluminium smelters. The merger looks not bad if the current financial valuations are ignored.
NatSteel serves Asia’s construction industry and targets to triple its growth by 2010. This marked a new beginning for the steel division. Australia. China. As a group with steel production capacity of more than 2 million tonnes per year. which is today known as NatSteel Holdings Pte Ltd. its full array of steel products is used for commercial buildings and residential housing. which are fabricated into the final shapes and forms tailored to the specific needs of each job-site customer.2) Tata steel-natsteel merger and acquisition:
NatSteel Holdings Pte Ltd. Headquartered in Singapore. and environment and safety programmes. Malaysia. NatSteel is on track to attaining its goal. These are processed into wire rods and reinforcement bars. NatSteel’s downstream facility boasts one of the largest single cut and-bend operations in the region. Steel Production.500 employees in Singapore.
. having integrated melting-rolling-fabricating facilities. As the only steel mill in Singapore. Thailand and Vietnam. the company played an important part in building Singapore in its early years. is a wholly-owned subsidiary of Tata
Steel — the world’s top ten largest steel producer. as well as infrastructure works such as tunnels. bridges and the Mass Rapid Transit system. engineering development. A new beginning Tata Steel acquired the steel business of NatSteel Ltd in 2005.
Company History( profile and structure):
Tata Iron & Steel Company Ltd. or NatSteel in short. With its continuous growth within the region. Today. procurement. The upstream operation melts scrap steel in an 80-tonne electric arc finger shaft furnace and casts the molten steel into billets. (TISCO) is the iron and steel production company associated with the Tata group of some 80 different industrial and other business enterprises in India. NatSteel is the Asia-Pacific hub which supports regional operations in production. NatSteel is one of the top steel providers in the Asia-Pacific with over 3. Philippines. logistics.
refractoriness. in this case in the economy of Victorian India. rolls. forging quality steel. Tata joined the family business after an education at Elphinstone College in Bombay and was sent to Lancashire. and the Far and Middle East during which he formulated his ideas on the best strategy to realize his own ambitions for success in business and to contribute to the economic development of India. one man whose vision and determination to give India a modern industrial economy helped provide a platform for the country's independence half a century after his death. Weaving and Manufacturing Company. As Tata was taking his first steps toward establishing a viable cotton spinning business. The Parsees. strips and bearings. TISCO also offers tinplate. a religious minority group. He believed that mills could function successfully in India in close proximity to the cotton-producing areas in the west of the country. He obtained air conditioning equipment from suppliers in the United States and the latest cotton spinning machinery installed to provide the optimum climatic conditions for spinning. wires. This was to be the first of many travels in Europe. Tata was present at its inaugural meeting and his devotion to the cause of an
. Tata's Early Beginnings in the 1800s The story of TISCO is the story of one family or. and cargo handling services. Jamsetji Nusserwanji Tata was born into a well-to-do family of Bombay Parsees in 1839. rods. ferro alloys and other minerals. TISCO operates as India's largest integrated steel works in the private sector with a market share of nearly 13 percent and is the second largest steel company in the entire industry. which was dominated by British interests and was being developed as a client imperial economy. tubes. England. the Central India Spinning. and project management services. thereby putting them in a strong position to undercut their Lancashire competitors. structural. he opened the Empress mill in Nagpur. he helped create what was by 1970 India's biggest nonpublic enterprise. Three years later.founded by members of the Tata family. Tata's father was a successful merchant with interests in the cotton trade to Britain. on the same day that Queen Victoria was declared empress of India. Through its subsidiaries. steel plant and material handling equipment. Tata's own background was in cotton production. His early ventures showed promise and in 1874 he founded his first company. Indian nationalism also was beginning to find a focus for its aspirations through the Indian National Congress. construction bars. software for process controls. Its products and services include hot and cold rolled coils and sheets. North America. in 1864 to represent the firm there. more accurately. had carved a niche for themselves in business. At the same time.
Natsteel production at two million tonne and Millennium Steel production at 1. 6 million tonne plant in Orissa (India) 12 million tonne in Jharkhand (India) 5 million tonne in Chhattisgarh (India) 3-million tonne plant in Iran 2. Tata Steel started a Provident Fund for its employees as early as in 1920.4-million tonne plant in Bangladesh 5 million tonne capacity expansion at Jamshedpur (India) 4.2 million tonne.4 million tonne. before the project was completed). were able to build to realize his ambitions. Steel has set an ambitious target to achieve a capacity of 100 million tonne by 2015. hydroelectric power.2 million tonne. 5. 2. a practice that became legally binding upon employers in India only in 1945. Cotton was only a start. 4. From his travels in other industrialized nations he had come to identify three essential elements for a modern industrial economy: steel production. which became a law for all employers under the Provident Fund Act only in 1952. Muthuraman stated that of the 100 million tonne. Tata Steel was established by Indian Parsi businessman Jamsetji Nusserwanji Tata in 1907 (he died in 1904. Similarly. Tata Steel introduced an 8-hour work day as early as in 1912 when only a 12-hour work day was the legal requirement in Britain. Although he did not live to see any of his schemes in these areas come to fruition. and then later generations of his family. Tata Steel is planning a 50-50 balance between greenfield facilities and acquisitions. Tata Steel's furnaces have never been disrupted on account of a labour strike and this is an enviable record. he laid the foundations on which his sons. which includes Corus
production at 18. It introduced leave-with-pay in 1920. 3. Tata is looking to add another 29 million tonnes through the acquisition route
Tata Steel has lined up a series of greenfield projects in India and outside which includes 1.
Overseas acquisitions have already added up to 21. 6. Managing Director B.independent India was undoubtedly a motivating factor in his own drive for success in business. and technical education.5 million tonne plant in Vietnam (feasibility studies underway)
enabling them to reach out to the target underprivileged groups.Success of the merger: Corporate Social Responsibility (CSR)
Community Initiatives Having pledged $1 million over three years to community initiatives. Human Capital Commitment NatSteel has achieved many national accolades in recognition of its commitment to employees. NatSteel has invested no less than S$20 million in plant equipment that protects the environment through energy conservation. and pollution and waste reduction. NatSteel is committed to serving the community in which it operates. Environment Commitment To do its part in corporate social responsibility. It achieved the People Developer Standard in recognition of its quality people development practices. recycling. It has also launched a CSR leave for staff. The company also won both the Work-Life Excellence Award and the Singapore Health Award (Gold) for three consecutive years
Tata steel and corus merger:
Company’s profile and structure:
'Tata Steel'. Jharkhand. says. Llanwern in Newport.
Corus was formed from the merger of Koninklijke Hoogovens N. Post Corus merger.6 billion takeover bid from Tata Steel.32.V. environment and occupational health. The deal is the largest Indian takeover of a foreign company and made Tata Steel the world's fifth-largest steel group. Scunthorpe. Teesside. cumulatively valued at USD 12.110 crore and net profit of over Rs 12. the Indian steel company..700 people (as of 2007). Finally . and employs about 82. The company was also recognized as the world's best steel producer by World Steel Dynamics in 2005. Tata Steel's chief. and causing lasting social and environmental damage at various locations. Trostre in Llanelli. with British Steel Plc on
6 October 1999. Tata Steel's bid to acquire Corus Group was challenged by CSN. including reduction in greenhouse emission.8 million tonnes.North Lincolnshire. Tata Steel is India's second-largest and second-most profitable company in private sector with consolidated revenues of Rs 1. the Brazilian steel maker. was the
world's 56th largest and India's 2nd largest steel company with an annual crude steel capacity of 3. In response. It also has rolling mills situated at Shotton. The company is listed on BSE and NSE.04 Billion.The company is facing increasing criticism that the drive for growth and profits is completely overshadowing its once famed philanthropy. Tata cites its programs for environment and resource conservation. 2008.350 crore during the year ended March 31. India. formerly known as TISCO (Tata Iron and Steel Company Limited). South
. "Our capital investment in pollution-abatement solutions was in the vicinity of Rs 400 crore in 2003-04. North Wales (which manufacturesColorcoat products). The company has increased waste re-use and re-cycling. raw materials and water consumption.". Cleveland (all in the United Kingdom) and IJmuiden in the Netherlands. It has major integrated steel plants at Port Talbot. Tata Steel purchased a 100% stake in the Corus Group at 608 pence per share in an all cash deal. On 20 October 2006 the board of directors of Anglo-Dutch steelmaker Corus accepted a $7. South Wales. on January 30. The following months saw a lot of negotiations from both sides of the deal. It is part of the Tata Group of companies. It is based in Jamshedpur. and reclaims land at its captive mines and collieries through forestation.
Brazilian steel marker Companhia Siderúrgica
. In November 2006.France. In addition it has tube mills located at Corby. credibility and excellence. South Yorkshire. Zwijndrecht and Maastricht in the Netherlands. customer focus.integrity.
Tata had a strong retail and distribution network in India and SE Asia. Motherwell. and Bergen. Hayange. creating value in steel. England. Corus was fighting to keep its productions costs under control and was on the look out for sources of iron ore. Profits were £580 million before tax and £451 million after tax. Tata steel's Continuous Improvement Program ‘Aspire’with the core values :Trusteeship. 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.
Reasons for merger:
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. Arnhem. Tata was a major supplier to the Indian auto industry and the demand for value added steel products was growing in this market.respect for individual. North Lanarkshire. Scotland. Rotherham and Stocksbridge. Corus's Continuous Improvement Program ‘The Corus Way’ with the core values : code of ethics.Wales. Stockton and Hartlepool in England and Oosterhout. Norway. This would give
the European manufacturer a in-road into the emerging Asian markets. integrity. selective growth and respect for our people. Group turnover for the year to 31 December 2005 was £10.142 billion. 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
The final valuation of Corus was thus put at $12. 2007. rather than by raising the debt itself.04 Billion.8bn infusion from Tata Steel ($2bn as its equity contribution.N.
Need of the change:
On January 31. Tata will be the Chairman of Tata Steel and Corus Mr. They countered Tata Steel's offer of 455 pence per share by offering 475 pence per share of Corus.
Success of the merger:
$3.5–3. following the lack of agreement on an offer. $1. whereas the new subsidiary may not be. $2. an auction process was triggered.6bn through high yield
a bridge loan)
loan) A new board was formulated with representation from both the companies to provide a common platform for strategy and integration. Following the conclusion of the auction process (at an unprecedented length of nine rounds) conducted by the Panel in accordance with Rule 32. Tata Steel announced the proposed acquisition of Corus Group at 608p per share. Jim Leng will be the deputy chairman of Tata Steel and Corus
.8bn through $5.
Mr. R.5–1.5 of the Code (the "Auction"). Fitch also stated that Corus' responsibility for the debt may lead to Corus' own unsecured debt rating being downgraded. that being 5p more than CSN's top offer of 603p. 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'. Tata's security credit rating is investment grade.
Problems faced by the company while merging:
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'.Nacional (CSN)challenged Tata Steel's proposal for acquisition.6bn through a LBO ($3. This does not affect the rating of bonds issued by Corus which are secured debt.05bn through senior term loan.
. Arun Gandhi to join the Corus board
Strategic and Integration Committee A 'Strategic and Integration Committee' was formulated to develop and execute the integration and further growth plans. B Muthuraman. Appropriate cross functional teams were formed under this committee to look into specific issues. Ishaat Hussain and Mr.
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