NUST Business School

Intro to

Mergers and Acquisitions

Assignment 1

Submitted to;
Dr. Mohsin Sadaqqat
Submitted by;
Muhammad Uneeb Asim

BS ACF 2K17 B

Date: 6th May, 2021

 Comments on ARY and Worldcall Telecom Merger

ARY is looking to acquire 51% of Worldcall Telecom. However, one of the main things that we
must analyze when looking at acquisitions is what the company that is acquirer stands to gain
from the deal. Worldcall is primarily a telecommunications company, whereas ARY is an
entertainment group. As such, there isn’t a lot of overlap in between what the companies do.

ARY has been trying to acquire Worldcall for some time, but the previous acquisition was
unable to go ahead. ARY themselves believe that Worldcall is a good company which is drying,
an analysis that is not wrong considering the losses Worldcall has had to endure over the last few
years. While the CEO remarked that buying the company and turning it around would be a
challenge, it is very difficult for a telecom company to compete in a market that is monopolized
by big players such as PTCL.

As such, I do not think that it is a good idea for ARY to acquire Worldcall. The company does
not have any competitive advantage in the telecommunications sector, and there are companies
out there that have a lot more market penetration than Worldcall.

As of now, ARY has acquired a total of 51% of the company. ARY did this through a slow and
gradual purchase of shares that ended in January 2021. Now, it is believed that the company
wants to acquire 100% of Worldcall through AKD Securities.

It was complained by the Pakistan Broadcaster Association that Worldcall could not be acquired
by ARY as that would create a conflict of interest between the two. This is because ARY is a
media company and Worldcall is a media distributor. ARY could cause damage to their
competitors that rely on Worldcall’ s network to distribute their media. There have not been any
new updates on this, but it is possible that this could be the case.

The deal is expected to be complete by the end of May. It remains to be seen whether the deal
will go through or there will be objections raised by the SECP or another competent authority.
However, even if the deal goes through, it does not seem likely that a company with as many
problems as Worldcall could be turned around, even by a media industry giant like ARY.