1. SOURCES OF VALUE CREATION
IN MERGER & ACQUISITION

2. Members of group -A
1-SOUMYALIN SANTY
2-HINA SULTANA
3-SUMIT PARIDA
4-SRADHANJALI BEHERA

3. INTRODUCTION
WHAT IS VALUE?
Value: Originated from a French word: “valoir”
which means ‘be worth’.
WHAT IS VALUE CREATION?
Value creation means performing activities that
Increases the value to customers and also to the
Shareholders.

4. Value Creation through M&A – What it
means?
• Synergies & Economies of Scale
• Gain access to new markets, customers, products
• Diversification of Risks
• Access to New Technology and Knowledge
• Ability to limit competition / gain market share

5. Value Creation Through M&A – Case
Study Company B
Company A
Primarily North India Focussed Strong in Western India

6. What benefits will potentially accrue
if Company A and B were to merge?
Ability to sell bundled product
(inverters & batteries)
Organic Expansion – Access to newer markets for
Battery Manufacturing in different products (North &
North India West)
Product
Use of common
diversification /
distribution network
Season neutral
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7. “Value Creation” through this
transaction.....
Company A+B =
Enhanced revenue & customer base + product
diversification + cost savings + production
efficiencies + new markets
ultimately leading to…
‘Improved shareholders wealth’
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8. SOURCES OF VALUE CREATION IN
M&A
There are four sources or models which create
values-
1- ANSOFF’S PRODUCT MARKET MATRIX
MODEL
2- BCG MATRIX MODEL
3- GRAND MATRIX MODEL
4- INDUSTRY/PRODUCT LIFE CYCLE
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9. ANSOFF’S PRODUCT MATRIX
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10. Market Guru Phillip Kotler divided this
into 3 stages:
• 1st stage is Intensive Growth Strategy:
A. MARKET PENETRATION
B. MARKET DEVELOPMENT
C. PRODUCT DEVELOPMENT
• 2nd stage is Integrative Growth Strategy:
A. BACKWARD INTEGRATION
B. FORWARD INTEGRATION
C. HORIZONTAL INTEGRATION
• 3rd stage is diversification growth strategy:
A. CONCENTRIC DIVERSIFICATION
B. HORIZONTAL DIVERSIFICATION
C. CONGLOMETRIC DIVERSIFICATION
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11. Value Creation Through Mergers &
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12. 1.STAR- STRATEGIES APPLIED ARE INTENSIVE STRATEGY, INTEGRATIVE
STRATEGY AND CONCENTRIC.
2.QUESTION MARK-STRATEGIES APPLIED ARE INTENSIVE GROWTH
STRATEGY
3.DOG- STRATEGIES APPLIED ARE DIVESTURE AND LIQUIDATION.
4.CASH COW- CONCENTRIC CONGLOMETRIC & HORIZONTAL
DIVERSIFICATION.

13. GRAND MATRIX
• THERE ARE 4 STAGES OF GRAND MATRIX
1. STAGE 1-STAR IN BCG MATRIX
2. STAGE 2-QUESTION MARK
3. STAGE 3-DOG
4. STAGE 4-CASH COW
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14. Value Creation Through Mergers &
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15. STRATEGIES APPLIED
• INTRODUCTION STAGE: MARKET PENETRATION,MARKET
DEVELOPMENT,CONGLOMETRIC DIVERSIFICATION &
HORIZONTAL INTEGRATION
• GROWTH STAGE:HORIZONTAL MERGER, DIVESTURE,
CONGLOMERATE DIVERSIFICATION
• MATURITY STAGE: HORIZONTAL MERGER, DIVESTURE .
• DECLINE STAGE:DIVESTURE CONGLOMERATE DIVERSIFICATION.

16. CONCLUSION
From the above discussion we come to a
conclusion that for creating values for the
Acquirer’s they remain an important part of
any company’s long term value creation
Strategy. The benefits of a well thought out
M&A strategy can be a source of competitive
advantage.
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17. THANK YOU
ANY QUESTIONS………….?
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