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1、2023 India M&A ReportMarch 2023Building Durable Advantage in Uncertain Times22023 India M&A ReportBoston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities.BCG was the pioneer in business strategy when it

2、was founded in 1963.Today,we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholdersempowering organizations to grow,build sustainable competitive advantage,and drive positive societal impact.Our diverse,global teams bring deep industry and functional ex

3、pertise and a range of perspectives that question the status quo and spark change.BCG delivers solutions through leading-edge management consulting,technology and design,and corporate and digital ventures.We work in a uniquely collaborative model across the firm and throughout all levels of the clie

4、nt organization,fueled by the goal of helping our clients thrive and enabling them to make the world a better place.AuthorsKanchan SamtaniAkshay KohliDhruv ShahAshish BaidManaging Director and Senior Partner,APAC Head-Transactions and Integrations Practice,BCG MumbaiManaging Director and Partner,Ind

5、ia Head-Corporate Finance and Strategy Practice,BCG MumbaiPartner,Core Member-Principal Investors and Private Equity Practice,BCG MumbaiKnowledge Expert,Core Member-Transactions and Integrations Practice,BCG Bengaluru42023 India M&A ReportExecutive summary(I/II)After the global spike in mergers and

6、acquisitions(M&A)activity during the COVID-19 pandemic in 2021 when companies invested for long-term advantage,2022 saw a reversion to pre-COVID levels globally.India,however,was an exception and showed continued M&A acceleration through 2022.Though global macroeconomic factors,such as rising intere

7、st rates,will have an impact,M&A momentum in India should benefit from supply-side build-up:corporate balance sheets are lush with free cash and significant debt capacity,while private equity dry powder is at elevated levels.However,given macroeconomic uncertainty,there is some degree of conservatis

8、m being observed:acquirers appear to be taking relatively smaller bets,translating into a lower number of large deals both globally as well as in India.Deals were driven not only by companies looking to grow their core but also by capability builds,business model extensions,and adjacency plays to ce

9、ment long-term advantage.M&A activity covered the full spectrum of companies:from new-age start-ups in hyper-growth mode to larger,established,and more mature corporates.Swift capital deployment in coming quarters is imperative to deliver returns for private and public market investors;M&A is one of

10、 the key channels for capital allocation in this context.52023 India M&A ReportExecutive Summary|Design Option 02|Page 1/2Executive summary(II/II)From a market perspective,a favorable environment for buyers to be on the lookout for quality deals as periods of relatively slower growth typically fuel

11、demand for attractive assets:while the stakes are high to get it right,the wide dispersion in fundamental performance and valuations surfaces attractive pockets of M&A opportunity.While M&A can be a growth engine and powerful value creation lever for most companies,especially in todays market enviro

12、nment,strategic,financial and execution discipline and focus are critical to unlocking not only strong but also sustainable value from deals.Green investing is a thematic M&A opportunity that is increasingly seeing traction globally as well as in India:early signs of such deals demonstrate relative

13、outperformance from a shareholder value creation lens.Healthy assets(strong fundamentals,market positions,management)facing near-term challenges and trading at more reasonable valuations present ripe M&A targets;however,it is crucial to disaggregate temporary dislocations from business model limitat

14、ions.Buyers must proactively be on the lookout for targets with the right strategic fit,build razor-sharp conviction in the business case and setup best-in-class integration capabilities to realize the full value potential.Sellers must understand the needs of their future investors,build strong proo

15、f points to buttress their equity narrative,and plan in advance to mitigate any separation challenges.62023 India M&A Report72023 India M&A ReportTable of contents010203Where We Are:M&A Activity in India TodayWhere We Are Headed:Expected M&A TailwindsWhat You Need to Do:Call-to-Action for CEOs,CFOs,

16、and BoardsPage 08Page 18Page 2782023 India M&A ReportSection01Where We Are:M&A Activity in India Today92023 India M&A ReportGlobal M&A activity has reverted downward to pre-COVID levelsDeal Value($Bn)1Number of Deals(#)8,00040,0006,00030,0004,00020,0002,00010,000004,27931,90940,90635,3972,5822,9513,

17、0882,8742,8703,9283,1371,802Deal VolumeDeal Value1.Deal value includes assumed liabilities Note:The total of 345,056 M&A transactions globally comprises pending,partly completed,completed,unconditional,and withdrawn deals announced between January 1,2013,and December 31,2022,with no transaction-size

18、 threshold.Self-tenders,recapitalizations,exchange offers,repurchases,acquisitions of remaining interest,minority stake purchases(up to 49.9%),privatizations,and spinoffs were excluded.Source:Refinitiv;BCG analysisGlobal-39%2,6092013201420152016201720182019202020212022After an exceptionally busy 202

19、1,M&A activity is reverting to long-term average levels due to:Tougher macroeconomic conditions:-geopolitical tensions,supply chain disruptions and inflation.Rising interest rate environment making deal financing more challenging than before.Drop in Global Deal Value in 2022 Compared to 202140%10202

20、3 India M&A ReportDeal Value($Bn)1Number of Deals(#)220132014201520162017201820192020202120222401,0001807501205006025000Deal VolumeDeal Value1.Deal value includes assumed liabilities 2.Deals involving an Indian target and/or acquirer.The value figure for 2022 includes HDFC Banks acquisition of Housi

21、ng Development Finance Corp.for$60.4BnNote:The total of 7,726 M&A transactions comprises pending,partly completed,completed,unconditional,and withdrawn deals announced between January 1,2013,and December 31,2022,with no transaction-size threshold.Self-tenders,recapitalizations,exchange offers,repurc

22、hases,acquisitions of remaining interest,minority stake purchases(up to 49.9%),privatizations,and spinoffs were excluded.Source:Refinitiv;BCG analysisHowever,Indian M&A activity has remained vibrant as seen in the continually growing deal volumesIndia879996673523137963835212418+114%11151ExcludingHDF

23、C MergerHigh deal volume drivingactivity in IndiaEven discounting for the large-ticket HDFC Ltd-HDFC Bank merger,M&A deal value remained steady in India buoyed by an increase in deal volume.Indian companies are leveraging the golden opportunity in the market by deal hunting and building a strategic

24、advantage through inorganic growth.112023 India M&A ReportPost-pandemic-induced dip,2022 saw corporates pursuing M&A for growth and strategic advantageNote:The total of 5,041 M&A transactions comprises pending,partly completed,completed,unconditional,and withdrawn deals announced between January 1,2

25、017,and December 31,2022,with no transaction-size threshold.Self-tenders,recapitalizations,exchange offers,repurchases,acquisitions of remaining interest,minority stake purchases(up to 49.9%),privatizations,and spinoffs were excluded.Source:Refinitiv;BCG analysisNumber of Deals(#)COVID-1914012010080

26、6040202017201820192020202120220Median 6880 58 Average monthly deal volume reduced to 48 deals per month during COVID,down from 70-75 per month pre-COVID.Start-up M&A deals increased in 2022 v/s 2021,driven by corporates investing in growth and capability.Mix of acquirers across start-ups as well as

27、scaled entities.20222020India122023 India M&A ReportIndian companies using acquisitions as a strategic tool to enhance capabilities and accelerate their play to grow the business in the long-termIndiaSelect ExamplesRationaleRationaleRationaleRationaleNote:The total of 996 M&A transactions in India c

28、omprises pending,partly completed,completed,unconditional,and withdrawn deals announced between January 1,2022,and December 31,2022,with no transaction-size threshold.Self-tenders,recapitalizations,exchange offers,repurchases,acquisitions of remaining interest,minority stake purchases(up to 49.9%),p

29、rivatizations,and spinoffs were excluded.Source:Refinitiv;BCG analysisZomato acquired Blink Commerce(Blinkit)for$570Mn in an all-stock deal in June 2022.Crompton Greaves acquired an 81%stake in Butterfly Gandhimathi for$275Mn in Feb 2022.Dabur India acquired 51%of Badshah Masala for$71Mn in Oct 2022

30、.Persistent Systems acquired a 100%stake in MediaAgility for$71Mn in March 2022.Enter quick commerce business and expand addressable as grocery market is larger than the food delivery market.Acquisition strengthens Crompton Greaves,small domestic appliances business;Butterfly is a top 3 pan-India ki

31、tchen and small domestic appliances player.Dabur expands its presence in the branded spices and seasonings market in India.Acquisition expands Persistent Systems,ability to execute cloud-based digital transformation;MediaAgility focuses on building end-to-end cloud-native engineering capabilities on

32、 Google Cloud.Companies are investing in adjacencies to expand TAM(Target Addressable Market)while leveraging synergies,as well as in capabilities that boost the growth potential of the core business by increasing their right-to-win.ZomatoCrompton GreavesDaburPersistent SystemsBlinkitButterflyBadsha

33、h MasalaMediaAgility132023 India M&A ReportM&A is not restricted to large companies:used as a growth lever across the spectrum of companiesIndiaNote:The total of 996 M&A transactions in India comprises pending,partly completed,completed,unconditional,and withdrawn deals announced between January 1,2

34、022,and December 31,2022,with no transaction-size threshold.Self-tenders,recapitalizations,exchange offers,repurchases,acquisitions of remaining interest,minority stake purchases(up to 49.9%),privatizations,and spinoffs were excluded.Source:Refinitiv;BCG analysisCORPORATE DEALS(Select Examples)START

35、-UP DEALS(Select Examples)ANNOUNCED DATEACQUIRERTARGETDEAL VALUE($Mn)2022|Mar2022|May2022|Dec2022|DecLarsen&ToubroPVRDalmia GroupReliance RetailMindtreeINOXJaypee CementMetro7,4968776573442022|JunBigFoot RetailPickrr Tech2002022|MarPerfiosKarza 792022|MarBYJUSIntap Labs102022|JunLenskartOWNDAYS400(R

36、umored Value)Irrespective of your companys current scale and maturity,M&A presents an important opportunity to accelerate growth,enter new business lines or build capabilities.Important to upfront identify the potential size of the target(s),their fit for your organization and portfolio,and their al

37、ignment with your strategic and financial objectives.142023 India M&A ReportGlobally,large M&A appears to be normalizing to historical levels,suggesting a degree of emerging conservatism from acquirers.Global1.Quartile 3 2.Quartile 1Source:Refinitiv;BCG Transaction Center Non-PE DealsPE DealsNumber

38、of Large Deals($500Mn+in Transaction Value)With concerns of an impending slowdown and rationalization of deal activity to pre-COVID levels,investors are exercising more caution in taking large bets.Post-COVID-19 Average Number of Deals2022 Average Number of DealsPre-COVID-19 Average Number of DealsC

39、OVID-19 AverageNumber of Deals1187169441298 62 Jan19Jan20Jan21Jan22Feb19Feb20Feb21Feb22Mar19Mar20Mar21Mar22Apr19Apr20Apr21Apr22May19May20May21May22Jun19Jun20Jun21Jun22Jul19Jul20Jul21Jul22Aug19Aug20Aug21Aug22Sep19Sep20Sep21Sep22Oct19Oct20Oct21Oct22Nov19Nov20Nov21Nov22Dec19Dec20Dec21Dec221601001201408

40、06040200Median79152023 India M&A Report.with similar cautiousness observed in IndiaIndiaNumber of Large Deals($100Mn+in Transaction Value)Post-COVID-19 Average Number of Deals2022 Average Number of DealsPre-COVID-19 Average Number of DealsCOVID-19 AverageNumber of Deals6.05.55.73.7Median5.57.3 3.0 J

41、an19Jan20Jan21Jan22Feb19Feb20Feb21Feb22Mar19Mar20Mar21Mar22Apr19Apr20Apr21Apr22May19May20May21May22Jun19Jun20Jun21Jun22Jul19Jul20Jul21Jul22Aug19Aug20Aug21Aug22Sep19Sep20Sep21Sep22Oct19Oct20Oct21Oct22Nov19Nov20Nov21Nov22Dec19Dec20Dec21Dec22129630121.Quartile 3 2.Quartile 1Source:Refinitiv;BCG Transac

42、tion Center Non-PE DealsPE Deals162023 India M&A ReportCorporate divestiture value and volume increased consistently post COVID-19 induced decline1.Deal value includes assumed liabilities 2.Deals involving an Indian target and/or acquirer.Excludes deals where the target parent and acquirer parent ar

43、e same Note:The total of 2,588 India M&A divestiture transactions globally comprises pending,partly completed,completed,unconditional,and withdrawn deals announced between January 1,2013,and December 31,2022,with no transaction-size threshold.Self-tenders,recapitalizations,exchange offers,repurchase

44、s,acquisitions of remaining interest,minority stake purchases(up to 49.9%),privatizations,and spinoffs were excluded.Source:Refinitiv;BCG analysisIndiaDeal Value($Bn)1Number of Deals2Deal VolumeDeal Value20132014201520162017201820192020202120221004007530050200251000025251381717223629+25%32297279262I

45、n the face of increasing costs of capital,corporate management teams,and investors are setting a higher bar on capital allocation:divesting under performing and/or non-core businesses where the confidence to scale profitably as part of the group entity is lower.This helps reinvest capital to fuel gr

46、owth in the core organically,pursue acquisitions,and re-purpose management bandwidth.Imperative for you to take a de-averaged view of your business,evaluate and clearly define strategic objectives for non-core units.Timely divestment is a powerful tool to conserve value and prune for long-term growt

47、h.172023 India M&A ReportSELLERHolcimEssar PowerViatrisPanacea BiotecCitigroupJaypeeGroupDivestitures of large assets driven by long-term strategic and financial considerations IndiaNote:The total of 297 India M&A divestiture transactions globally comprises pending,partly completed,completed,uncondi

48、tional,and withdrawn deals announced between January 1,2022,and December 31,2022,with no transaction-size threshold.Self-tenders,recapitalizations,exchange offers,repurchases,acquisitions of remaining interest,minority stake purchases(up to 49.9%),privatizations,and spinoffs were excluded.Source:Ref

49、initiv;BCG analysisCORPORATE DEALS(Select Examples)ANNOUNCED DATE2022|May2022|Jun2022|Feb2022|Feb2022|Mar2022|DecDebt reduction is one of the biggest reasons for divestment e.g.Jaypee Groups exit from the cement business.Panacea Biotecs sale of its domestic formulation brand portfolio aligned with i

50、ts plan to be debt-free.Divestments by MNCs are driven by specific strategic portfolio considerations e.g.Citibanks exit from India retail business given its high competitive intensity and its inability to capture market share.Holcims divestment of Ambuja Cement is in line with its global objective

51、of sustainability.ACQUIRERAdani EnterprisesAdani TransmissionBioconMankindAxis BankDalmia BharatTARGETAmbuja CementsEssar Power TransmissionViatris(Biosimilars Business)Panacea Biotec(Domestic Assets)Citigroup(Consumer Banking)Jaiprakash(Cement)DEAL VALUE($Mn)6,2282473,3352491,629657182023 India M&A

52、 ReportSection02Where We Are Headed:Expected M&A Tailwinds192023 India M&A ReportAttractive demand-side pools with fundamentally healthy assets facing temporary performance pressures coming out of the pandemic.Corrected valuations to more reasonable levels seen in pockets,presenting an opportunistic

53、 window for prospective buyers to explore inorganic strategic moves.Green investing is a thematic M&A opportunity to consider-increasingly seeing traction globally as well as in India.Supply-side build-up,underscored by investor cautiousness in todays uncertain environment,is likely to boost M&A act

54、ivity going forward.192023 India M&A ReportNote:Cash balances include cash and cash equivalents summed up across all listed companies in India;Venture funds include all VC stages.Distressed includes distressed debt,special situations,and turnarounds.Dry powder based on Fund Manager location funds wi

55、th location in India are used for calculation;Dry powder represents capital available to fund managers for investment,i.e.,committed capital that has not yet been called for investment;85%of funds in India have not disclosed their called funds%;for these funds,an industry average of 95%is used as a

56、benchmark called funds%,basis discussion with different sources.Source:S&P Capital IQ;Preqin;BCG analysisIndian M&A is likely to benefit from a supply-side build-upDry Powder($Bn)00.0050.550101.0150151.52502001002010201020122012201320132014201420152015201620162017201720182018202020202021202120222022

57、2019201920112011+85%Average D/E Ratio(x)Cash&Cash Equivalents($Bn)Cash&Cash EquivalentAverage D/E Ratio13.37.26.68.16.86.75.14.94.24.95.06.75.8Cash balances have been increasing,while leverage ratios are decreasingPE Dry Powder(for funds headquartered in India)has reached record levels in 2022India2

58、02023 India M&A Report212023 India M&A Report1.How have your capital allocation and investing practices or recommendations changed since the beginning of the inflationary and recessionary environment?2.Should companies reshape their portfolio?Note:All questions were posed with respect to financially

59、 healthy companies,which were defined as companies with relatively strong and resilient free cash flow and a healthy balance sheet.Source:BCG Investor Perspectives Series,Q1 2023,February 22,2023;n=150GlobalWhile investor sentiment is conservative,most believe that now is the time to proactively pur

60、sue portfolio-reshaping opportunities and build a long-term advantagehowever investors are supportive of financially healthy companies and actively reshaping their portfolios2Investors are holding on to more cash and valuing investments more conservatively1Investors(%)Changes in Investing PracticesA

61、ssuming a higher cost of capital and a discount rate80%Valuing investments more conservatively(for example,by giving more weight to bearish scenarios)75%Investing more on the basis of value and less on the basis of growth momentum74%Spending more time on cash flow and balance sheet consideration72%I

62、nvestors(%)Changes in Capital AllocationHousing more cash and dry powderInvesting more in sectors and companies with longer-term structural growth&tailwindsInvesting more in sectors and companies that are benefiting from the current macro environmentInvesting more in sectors and companies that are a

63、ble to pass on cost increases through pricing73%73%74%76%68%investors believe acquisitions should be actively pursued to strengthen the business at current valuation levels.75%investors believe exiting or divesting lines of businesses should be considered to strengthen the overall company in the cur

64、rent market environment.222023 India M&A ReportPerformance gaps among companies gets amplified in a tougher economic environment1.Average across the last four US downturns since 1985;based on performance compared with a three-year pre-downturn baseline for US companies with at least$50 million in sa

65、les2.Annualized revenue growth during the downturn 3.Compared with the three-year average pre-downturn EBIT marginSource:S&P Compustat and Capital IQ;BCG Henderson Institute GlobalIncreasing Sales GrowthFalling Sales GrowthShrinking EBIT MarginExpanding EBIT Margin 14%14%28%44%BEST PERFORMING COMPAN

66、IESWORST PERFORMING COMPANIESSales Growth and EBIT Margin during downturn1Large differences observed between best and worst-performing companies(14 pp2 difference in revenue growth and 7 pp3 difference in EBIT growth)in periods of slower growth.Critical to identify fundamentally strong companies exp

67、eriencing temporary performance pressures due to macro-economic factors.Building a medium-to-long-term investment thesis can help discover hidden gems.232023 India M&A ReportLower-growth economy acquisitions pay off in the medium-termNote:Strong-economy,8.0%(low growth-economy,5.7%)quarters are defi

68、ned in which Indias real GDP growth rate is in the top(bottom)third of all growth rates in our observation period(January 2000 to September 2022).The total of 570 M&A transactions comprises pending,partly completed,completed,unconditional,and withdrawn deals announced between January 2000 and Septem

69、ber 2022 with a deal value greater than$50M.Benchmark index=S&P BSE Sensex index and Nifty 50 index(where BSE Sensex was not available as a benchmark).Source:Refinitiv;BCG analysis;BCG Case ExperienceIndiaLower-growth economy deals outperform strong-growth-economy deals by more than 18%.The benefits

70、 are even higher for non-core acquisitions (outside the buyers industry).Whether you are an experienced deal maker or an occasional acquirer,slower growth periods present a golden opportunity to invest in attractive assets and extract significant value.Cumulative Relative Total Shareholder Return In

71、dex(Relative to Rebalanced Market Index)Lower Growth-Economy DealsStrong Growth-Economy Deals+17.6100100.0105.0103.0100.5T3T+392.785.4Year 1100:Index is Relative to the Deal PeriodDeals Outperformingthe Market T=Date of deal AnnouncementYear 2242023 India M&A ReportCurrent valuations suggest there a

72、re attractive pockets of opportunity to identify and pursue reasonably priced dealsIndiaNote:The total of 493 M&A transactions comprises completed,unconditional,and pending deals announced between January 1,2005,and December 31,2022,with no filter on transaction values and share transfers.Self-tende

73、rs,recapitalizations,exchange offers,repurchases,acquisitions of remaining interest,minority stake purchases(up to 49.9%),privatizations,and spinoffs were excluded.Only deals with a disclosed deal value were considered.Source:Refinitiv;BCG analysisMedian EV/EBITDA Acquisition Multiple(x)200520052006

74、20062022202220212021202020202019201920182018201720172016201620152015201420142013201320122012201120112010201020092009200820082007200725300-10051010152020Average 13.4Average 8.713Median One-Week Deal Premium(%)-3Takeover premiums are tracking at an all-time lowDeal valuations are tracking at long-term

75、 averageProspective buyers must act quickly and decisively as the window for sourcing select assets at corrected valuations is short.As the level of economic uncertainty decreases,valuations will likely rebound.Right time for corporate buyers to explore strategic deals and place opportunistic bets,w

76、hich may have been held back for a while due to highly inflated valuations across the board.252023 India M&A ReportGreen Deals are emerging as an attractive investment theme;the transition to clean energy is the largest driverThe volume and value of green deals has increased over the past decades wi

77、th a steep rise in 2021The transition to clean energy is the main driver of deals 1.Deal value includes assumed liabilities 2.Percentage of all deals in the respective industryNote:The total of 466 green M&A transactions in India comprises pending,partly completed,completed,unconditional,and withdra

78、wn deals announced from January 1,2005,to December 31,2021,with no transaction size threshold.Self-tenders,recapitalizations,exchange offers,repurchases,privatizations,and spinoffs were excluded.TMT=Technology,Media,and Telecommunications.Source:Refinitiv;BCG analysisDeal Value($Bn)1Green Deals in t

79、he Acquirers Industry(%)2Number of Deals504030750640530420310212010000Subject to Limited Sample SizeEnergy&UtilitiesMaterialsConsumerHealthcareIndustrialsTMTFinancials&Real EstateDeal VolumeDeal ValueIndia20052005200620062021202120202020201920192018201820172017201620162015201520142014201320132012201

80、22011201120102010200920092008200820072007262023 India M&A ReportGreen Deals create value both in the short-term and long-term when compared to Non-Green Deals1.CAR=cumulative abnormal return 2.RTSR=Relative Total Shareholder ReturnNote:The total of 164 green M&A transactions in APAC comprises comple

81、ted,unconditional,and pending deals announced from January 1,2001,to December 31,2021.We included only deals with a transaction value of at least$100 million,a share transfer of at least 50%,and a ratio of deal value to the acquirers enterprise value of greater than 5%.Self-tenders,recapitalizations

82、,exchange offers,repurchases,acquisitions of remaining interest,minority stake purchases(up to 49.9%),privatizations,and spinoffs were excluded.Only deals with a disclosed value and return calculations were considered.Source:Refinitiv;BCG analysisAPACCAR1 Green vs.Non-Green (2001-2021)Median CAR(%)N

83、on-Green DealGreen Deal0.571.232.1xTwo-Year RTSR2 Green vs.Non-Green (2001-2021)Median 2Y RTSR(%)Non-Green DealGreen Deal0.412.656.5xCompanies with a focus on sustainability are able to create value through multiple levers:Better financing access and lower cost of funds(high ESG companies enjoy 0.5-

84、0.7%lower cost of capital).Up to 10%higher market valuations(e.g.,investors are willing to pay a premium for renewable energy assets due to energy transition concerns).Avoidance of carbon taxes and other regulatory risks by lowering emissions.Operational cost savings through decarbonization-related

85、efficiency gains.2-3%revenue and volume upside potential from products marketed as climate-friendly.Section03What You Need to Do:Call-to-Action for CEOs,CFOs,and Boards282023 India M&A ReportUnlocking value from M&A is non-trivial:More than half of M&A deals destroy value281.Based on public-to-publi

86、c transactions from 1980 to 2018.Value measured as Relative Total Shareholder Return(RTSR)for one year after the announcement date 2.Based on public-to-public transactions from 1980 to 2018.Measured as one-year RTSR for top 25%deals that generate positive RTSR compared to bottom 25%deals that genera

87、te positive RTSR 3.More than one reason possible;sample size=277Source:Refinitiv;Datastream;BCG Transactions and IntegrationsDrivers of Failure%of deals analyzed reducing value3STRATEGICFINANCIALEXECUTIONof deals add value1value when successful246%5xHowever,when done right:Wrong Strategic FitWrong C

88、andidateHigh Price/Low SynergiesInappropriate Financial StructureInappropriate Integration(Approach)Poor Negotiation 42%30%21%18%11%46%Global292023 India M&A ReportFirst-time acquirers-increasing in India in recent years-at an even higher risk of getting it wrongIndiaOne-year average RTSR1(%)-2.4Fir

89、st-time acquirerSerial acquirer2.9Serial acquirers leverage their deal know-how and integration experience to generate higher relative value.Established capabilities to conduct thorough diligence assessment of target.Realistic view of potential value creation,timelines and upfront understanding of r

90、isks in integration.1.RTSR=Relative Total Shareholder Return Note:Total of 340 India M&A transactions comprises pending,partly completed,completed,unconditional,and withdrawn majority deals announced between 1980 and 2022 with a deal value greather than or equal$100Mn.Only deals with a public buyer

91、were considered.First-time acquirer completed only 1 deal throughout the entire timeframe.Serial acquirer completed at least five transactions in the sample.Source:Refinitiv;Datastream;BCG analysisProportion of first-time deal-makers has been rising substantially in India over the past decade-raisin

92、g the bar on value capture certainty.Critical for new acquirers to plan rigorously and run an airtight process oriented around value creation.5.3%302023 India M&A ReportThe imperative of a winning M&A strategy:Strategic,financial and execution disciplineFIND ITBUY ITMANAGE ITCultivating Relevant Tar

93、getsStructuring the Deal and Conducting DiligenceDriving Superior Performance of the Asset Post-Close Defining clear parameters to guide the acquisition:financial,strategic fit,ownership and identifying businesses that fit.Quantifying the synergy potential upfront.Incorporate the Total Shareholder R

94、eturn(TSR)lens into evaluation&prioritization of M&A plays.Pressure test assumptions and run sensitivities to be clear on what you need to believe.Evaluate optimal deal structures.Critical to run a tight post-merger integration process to unlock,realize,and track synergies.Invest in building team an

95、d change management to ensure sustainable gains.STRATEGIC DISCIPLINE:ADVANTAGED SOURCINGFINANCIAL DISCIPLINE:TRANSACTION EXCELLENCEEXECUTION DISCIPLINE:INTEGRATION/VALUE CAPTUREThe bar on getting it right is raised as companies increasingly pursue scope deals(e.g.capability builds,adjacencies,new be

96、ts)beyond just scale deals(e.g.revenue expansion in the core).312023 India M&A ReportBuyer view:M&A hacks for corporate executivesTHE NUMBERSTHE WALKTHE TALK Be conservative in your business case,acknowledging that some things are bound to fail when it comes to on-ground execution.Prioritize a few v

97、alue creation levers to double down on and deliver,and focus consistently dont go after everything especially the ones you cannot easily control.Dont change things for the sake of changing them retain what works well in the operating model and is likely to continue to,while breaking and fixing what

98、doesnt.You need to find the right pace for the integration all things are not made equal and some just require more soak time than others.Dont underestimate the importance of cultural integration and change management bring the organization along by communicating frequently,transparently and consist

99、ently.People get jaded quickly by leadership talk dont manufacture it because people will pay more attention to what you are doing than what you are saying.THE SEARCH Actively scan the market for optimal targets attractive deals can often become available unexpectedly.Define clear parameters to guid

100、e potential acquisitions financial,strategic fit,ownership etc.312023 India M&A Report322023 India M&A ReportInvestor Diligence:Deep understanding of future investors is required to cater to their needs.Two sides of the Same Coin:Investment highlights and business plan must be in perfect sync.Strong

101、 Proof Points:Claims of investment uniqueness have to be substantiated.One Story:Internal and external stakeholders need to be told a consistent narrative.Eyes on the Prize:Great pre-sale business performance is the best credential.Interdependencies:Competing milestones and priorities between workst

102、reams will need to be resolved continuously.Plan for Soft-Side Separation Issues:Alignment on talent/leadership separation decisions,job location change implications,communications/change management on both sides.Successful DivestituresSeller view:Commandments to execute successful divestituresFor F

103、urther ReadingThe M&A Window Is Wide Openfor NowAn article by Boston Consulting Group,March 2023 BCG Investor Perspectives SeriesA survey by Boston Consulting Group,February 2023 The SPAC Bust Could Be a Boon for TargetsAn article by Boston Consulting Group,January 2023 Organization Design Will Make

104、 or Break a DealAn article by Boston Consulting Group,October 2022Dealmaking Remains Active as Dark Clouds FormA report by Boston Consulting Group,October 2022Green Deals Gain Steam A report by Boston Consulting Group,October 2022Do Green Deals Create Value?A report by Boston Consulting Group,Octobe

105、r 2022The Winning Moves in Green Dealmaking A report by Boston Consulting Group,October 2022Most Tech Deals Focus on Growth.Most Post-Merger Integrations Dont.An article by Boston Consulting Group,June 2022How Private Equity Can Create Value Through Purpose A report by Boston Consulting Group&World

106、Economic Forum,April 2022The Tech Challenges When Private Equity Buys a Carve-Out An article by Boston Consulting Group,March 2022Boston Consulting Group publishes reports on related topics that may be of interest to senior executives.Recent examples include:332023 India M&A Report342023 India M&A R

107、eportNote to the ReaderAbout the AuthorsKanchan Samtani is a Managing Directorand Senior Partner in the Mumbai office ofBoston Consulting Group.Akshay Kohli is a Managing Directorand Partner in the Mumbai office ofBoston Consulting Group.Dhruv Shah is a Partner in the Mumbai office of Boston Consult

108、ing Group.Ashish Baid is a Knowledge Expert and Team Manager(APAC)in the Bengaluru office of Boston Consulting Group.AcknowledgementsWe would like to thank Jens Kengelbach,Daniel Friedman and Jared Feiger for their support and guidance while developing this report.We would like to thank Yiran Wang a

109、nd Bhupendra Yadav for their assistance in writing this report.We are thankful to Jasmin Pithawala,Komal Mohan and Sucheta Desai for managing the marketing process as well as Jamshed Daruwalla,Rahul Surve,Saroj Singh,Pradeep Hire,Sujatha Moraes,Seshachalam Marella,Saurabh Tikekar and Bhagyashree Kat

110、kade for their contribution to editing,design and production of this report.For Further ContactIf you would like to discuss the themes andcontent of this report,please contact:Kanchan SamtaniManaging Director and Senior Partner,APAC Head-Transactions and Integrations Practice,BCG Mumbai+91 22 6749 7

111、074Samtani.K Akshay KohliManaging Director and Partner,India Head-Corporate Finance and Strategy Practice,BCG Mumbai+91 22 6749 7066Kohli.A Dhruv ShahPartner,Core Member-Principal Investors and Private Equity Practice,BCG Mumbai+91 22 6749 7275Shah.D Ashish BaidKnowledge Expert,Core Member-Transactions&Integrations Practice,BCG Bengaluru+91 080 4679 9100Baid.A352023 India M&A Report