2023IndiaM&AReportBuildingDurableAdvantageinUncertainTimesMarch2023每日免費獲取報告1、每日微信群內分享7+最新重磅報告；2、每日分享當日華爾街日報、金融時報；3、每周分享經濟學人4、行研報告均為公開版，權利歸原作者所有，起點財經僅分發做內部學習。掃一掃二維碼關注公號回復：研究報告加入“起點財經”微信群。。2023IndiaM&AReport2BostonConsultingGrouppartnerswithleadersinbusinessandsocietytotackletheirmostimportantchallengesandcapturetheirgreatestopportunities.BCGwasthepioneerinbusinessstrategywhenitwasfoundedin1963.Today,weworkcloselywithclientstoembraceatransformationalapproachaimedatbene?tingallstakeholders—empoweringorganizationstogrow,buildsustainablecompetitiveadvantage,anddrivepositivesocietalimpact.Ourdiverse,globalteamsbringdeepindustryandfunctionalexpertiseandarangeofperspectivesthatquestionthestatusquoandsparkchange.BCGdeliverssolutionsthroughleading-edgemanagementconsulting,technologyanddesign,andcorporateanddigitalventures.Weworkinauniquelycollaborativemodelacrossthe?rmandthroughoutalllevelsoftheclientorganization,fueledbythegoalofhelpingourclientsthriveandenablingthemtomaketheworldabetterplace.AuthorsKanchanSamtaniAkshayKohliManagingDirectorandSeniorPartner,APACHead-TransactionsandIntegrationsPractice,BCGMumbaiManagingDirectorandPartner,IndiaHead-CorporateFinanceandStrategyPractice,BCGMumbaiDhruvShahAshishBaidPartner,KnowledgeExpert,CoreMember-PrincipalInvestorsandPrivateEquityPractice,BCGMumbaiCoreMember-TransactionsandIntegrationsPractice,BCGBengaluru2023IndiaM&AReport4Executivesummary(I/II)A?ertheglobalspikeinmergersandacquisitions(M&A)activityduringtheCOVID-19pandemicin2021whencompaniesinvestedforlong-termadvantage,2022sawareversiontopre-COVIDlevelsglobally.India,however,wasanexceptionandshowedcontinuedM&Aaccelerationthrough2022.??Dealsweredrivennotonlybycompanieslookingtogrowtheircorebutalsobycapabilitybuilds,businessmodelextensions,andadjacencyplaystocementlong-termadvantage.M&Aactivitycoveredthefullspectrumofcompanies:fromnew-age"start-ups"inhyper-growthmodetolarger,established,andmorematurecorporates.However,givenmacroeconomicuncertainty,thereissomedegreeofconservatismbeingobserved:acquirersappeartobetakingrelativelysmallerbets,translatingintoalowernumberoflargedealsbothgloballyaswellasinIndia.Thoughglobalmacroeconomicfactors,suchasrisinginterestrates,willhaveanimpact,M&AmomentuminIndiashouldbene?tfromsupply-sidebuild-up:corporatebalancesheetsarelushwithfreecashandsigni?cantdebtcapacity,whileprivateequity"drypowder"isatelevatedlevels.?Swi?capitaldeploymentincomingquartersisimperativetodeliverreturnsforprivateandpublicmarketinvestors;M&Aisoneofthekeychannelsforcapitalallocationinthiscontext.2023IndiaM&AReport5Executivesummary(II/II)Fromamarketperspective,afavorableenvironmentforbuyerstobeonthelookoutforqualitydealsasperiodsofrelativelyslowergrowthtypicallyfueldemandforattractiveassets:whilethestakesarehighto"getitright",thewidedispersioninfundamentalperformanceandvaluationssurfacesattractivepocketsofM&Aopportunity.?Healthyassets(strongfundamentals,marketpositions,management)facingnear-termchallengesandtradingatmorereasonablevaluationspresentripeM&Atargets;however,itiscrucialtodisaggregatetemporarydislocationsfrombusinessmodellimitations."Green"investingisathematicM&AopportunitythatisincreasinglyseeingtractiongloballyaswellasinIndia:earlysignsofsuchdealsdemonstraterelativeoutperformancefromashareholdervaluecreationlens.WhileM&Acanbeagrowthengineandpowerfulvaluecreationleverformostcompanies,especiallyintoday'smarketenvironment,strategic,?nancialandexecutiondisciplineandfocusarecriticaltounlockingnotonlystrongbutalsosustainablevaluefromdeals.?Buyersmustproactivelybeonthelookoutfortargetswiththerightstrategic?t,buildrazor-sharpconvictioninthebusinesscaseandsetupbest-in-classintegrationcapabilitiestorealizethefullvaluepotential.?Sellersmustunderstandtheneedsoftheirfutureinvestors,buildstrongproofpointstobuttresstheirequitynarrative,andplaninadvancetomitigateanyseparationchallenges.2023IndiaM&AReport6Tableofcontents010203WhereWeAre:M&AActivityinIndiaTodayWhereWeAreHeaded:ExpectedM&ATailwindsWhatYouNeedtoDo:Call-to-ActionforCEOs,CFOs,andBoardsPage08Page18Page27Section01WhereWeAre:M&AActivityinIndiaTodayGlobalGlobalM&Aactivityhasreverteddownwardtopre-COVIDlevels~40%DropinGlobalDealValuein2022Comparedto2021DealValue($Bn)1NumberofDeals(#)40,9068,00040,00030,00020,00010,0000A?eranexceptionallybusy2021,M&Aactivityisrevertingtolong-termaveragelevelsdueto:35,3976,0004,00031,9092,582-39%4,279Toughermacroeconomicconditions:-geopoliticaltensions,supplychaindisruptionsandin?ation.3,9283,1373,0882,8702,8742,9512,6091,80220132,0000Risinginterestrateenvironmentmakingdeal?nancingmorechallengingthanbefore.201420152016201720182019202020212022DealVolumeDealValue1.DealvalueincludesassumedliabilitiesNote:Thetotalof345,056M&Atransactionsgloballycomprisespending,partlycompleted,completed,unconditional,andwithdrawndealsannouncedbetweenJanuary1,2013,andDecember31,2022,withnotransaction-sizethreshold.Self-tenders,recapitalizations,exchangeo?ers,repurchases,acquisitionsofremaininginterest,minoritystakepurchases(upto49.9%),privatizations,andspino?swereexcluded.Source:Re?nitiv;BCGanalysis2023IndiaM&AReport9IndiaHowever,IndianM&AactivityhasremainedvibrantasseeninthecontinuallygrowingdealvolumesDealValue($Bn)1NumberofDeals(#)2HighdealvolumedrivingactivityinIndia2401,000996879Evendiscountingforthelarge-ticketHDFCLtd-HDFCBankmerger,M&AdealvalueremainedsteadyinIndiabuoyedbyanincreaseindealvolume.18012060750673+114%ExcludingHDFCMerger500111?6Indiancompaniesareleveragingthegoldenopportunityinthemarketbydealhuntingandbuildingastrategicadvantagethroughinorganicgrowth.250052353837312418215102013201420152016201720182019202020212022DealVolumeDealValue1.Dealvalueincludesassumedliabilities2.DealsinvolvinganIndiantargetand/oracquirer.Thevalue?gurefor?0??includesHDFCBank’sacquisitionofHousingDevelopmentFinanceCorp.for$6?.4BnNote:Thetotalof7,726M&Atransactionscomprisespending,partlycompleted,completed,unconditional,andwithdrawndealsannouncedbetweenJanuary1,2013,andDecember31,2022,withnotransaction-sizethreshold.Self-tenders,recapitalizations,exchangeo?ers,repurchases,acquisitionsofremaininginterest,minoritystakepurchases(upto49.9%),privatizations,andspino?swereexcluded.Source:Re?nitiv;BCGanalysis2023IndiaM&AReport10IndiaPost-pandemic-induceddip,2022sawcorporatespursuingM&AforgrowthandstrategicadvantageNumberofDeals(#)1402020120100806040200Averagemonthlydealvolumereducedto48dealspermonthduringCOVID,downfrom7?-7?permonthpre-COVID.80Median68202258Start-upM&Adealsincreasedin2022v/s2021,drivenbycorporatesinvestingingrowthandcapability.Mixofacquirersacrossstart-upsaswellasscaledentities.201720182019202020212022COVID-19Note:Thetotalof5,041M&Atransactionscomprisespending,partlycompleted,completed,unconditional,andwithdrawndealsannouncedbetweenJanuary1,2017,andDecember31,2022,withnotransaction-sizethreshold.Self-tenders,recapitalizations,exchangeo?ers,repurchases,acquisitionsofremaininginterest,minoritystakepurchases(upto49.9%),privatizations,andspino?swereexcluded.Source:Re?nitiv;BCGanalysis2023IndiaM&AReport11IndiaIndiancompaniesusingacquisitionsasastrategictooltoenhancecapabilitiesandacceleratetheirplaytogrowthebusinessinthelong-termSelectExamplesCompaniesareinvestinginadjacenciestoZomatoBlinkitCromptonGreavesDaburPersistentSystemsMediaAgilityButter?yBadshahMasalaexpandTAM(TargetAddressableMarket)whileleveragingsynergies,aswellasincapabilitiesthatboostthegrowthpotentialofthecorebusinessbyincreasingtheirZomatoacquiredBlinkCommerce(Blinkit)for$570Mninanall-stockdealinJune2022.CromptonGreavesacquiredan81%stakeinButter?yGandhimathifor$275MninFeb2022.DaburIndiaacquired51%ofBadshahMasalafor$71MninOct2022.PersistentSystemsacquireda100%stakeinMediaAgilityfor$71MninMarch2022.RationaleRationaleRationaleRationaleEnterquickcommercebusinessandexpandaddressableasgrocerymarketislargerthanthefooddeliverymarket.AcquisitionstrengthensCromptonGreaves,smalldomesticappliancesbusiness;Butter?yisatop3pan-IndiakitchenDaburexpandsitspresenceinthebrandedspicesandseasoningsmarketinIndia.AcquisitionexpandsPersistentSystems,abilitytoexecutecloud-baseddigitaltransformation;MediaAgilityfocusesonbuildingend-to-endcloud-nativeengineeringcapabilitiesonright-to-win.andsmalldomesticappliancesplayer.GoogleCloud.Note:Thetotalof996M&AtransactionsinIndiacomprisespending,partlycompleted,completed,unconditional,andwithdrawndealsannouncedbetweenJanuary1,2022,andDecember31,2022,withnotransaction-sizethreshold.Self-tenders,recapitalizations,exchangeo?ers,repurchases,acquisitionsofremaininginterest,minoritystakepurchases(upto49.9%),privatizations,andspino?swereexcluded.Source:Re?nitiv;BCGanalysis2023IndiaM&AReport12IndiaM&Aisnotrestrictedtolargecompanies:usedasagrowthleveracrossthespectrumofcompaniesANNOUNCEDDATEACQUIRERTARGETDEALVALUE($Mn)IrrespectiveofyourCORPORATEDEALS(SelectExamples)company'scurrentscaleandmaturity,M&Apresentsanimportantopportunitytoaccelerategrowth,enternewbusinesslinesorbuildcapabilities.2022|Mar2022|May2022|Dec2022|DecLarsen&ToubroPVRMindtreeINOX7,496877DalmiaGroupRelianceRetailJaypeeCementMetro657344Importanttoupfrontidentifythepotentialsizeofthetarget(s),their?tforyourorganizationandportfolio,andtheiralignmentwithyourstrategicandSTART-UPDEALS(SelectExamples)2022|JunLenskartOWNDAYS?00(RumoredValue)?nancialobjectives.2022|Jun2022|Mar2022|MarBigFootRetailPer?osPickrrTechKarza200??BYJU'SIntapLabs10Note:Thetotalof996M&AtransactionsinIndiacomprisespending,partlycompleted,completed,unconditional,andwithdrawndealsannouncedbetweenJanuary1,2022,andDecember31,2022,withnotransaction-sizethreshold.Self-tenders,recapitalizations,exchangeo?ers,repurchases,acquisitionsofremaininginterest,minoritystakepurchases(upto49.9%),privatizations,andspino?swereexcluded.Source:Re?nitiv;BCGanalysis2023IndiaM&AReport13GlobalGlobally,largeM&Aappearstobenormalizingtohistoricallevels,suggestingadegreeofemergingconservatismfromacquirers...NumberofLargeDeals($500Mn+inTransactionValue)Withconcernsofanimpendingslowdownandrationalizationofdealactivitytopre-COVIDlevels,investorsareexercisingmorecautionintakinglargebets.6?44??87?16014012010080Pre-COVID-19AverageNumberofDealsCOVID-19AverageNumberofDealsPost-COVID-19AverageNumberofDeals2022AverageNumberofDeals??8Median7?26?6040200Non-PEDealsPEDeals1.Quartile32.Quartile1Source:Re?nitiv;BCGTransactionCenter2023IndiaM&AReport14India...withsimilarcautiousnessobservedinIndiaNumberofLargeDeals($100Mn+inTransactionValue)5.73.76.?5.5129Pre-COVID-19AverageNumberofDealsCOVID-19AverageNumberofDealsPost-COVID-19AverageNumberofDeals2022AverageNumberofDeals?7.36Median5.5?33.?0Non-PEDealsPEDeals1.Quartile32.Quartile1Source:Re?nitiv;BCGTransactionCenter2023IndiaM&AReport15IndiaCorporatedivestiturevalueandvolumeincreasedconsistentlypostCOVID-19induceddeclineInthefaceofincreasingcostsofcapital,corporatemanagementteams,andinvestorsaresettingahigherbaroncapitalallocation:divestingunderperformingand/ornon-corebusinesseswherethecon?dencetoscalepro?tablyaspartofthegroupentityislower.Thishelpsreinvestcapitaltofuelgrowthinthecoreorganically,pursueacquisitions,andre-purposemanagementbandwidth.DealValue($Bn)1NumberofDeals21004002977550253002001000279??2+2?%Imperativeforyoutotakea?632de-averagedviewofyourbusiness,evaluateandclearlyde?nestrategicobjectivesfornon-coreunits.???5?5???7?7??8Timelydivestmentisapowerfultooltoconservevalueand02013201420152016201720182019202020212022"pruneforlong-termgrowth".DealVolumeDealValue1.Dealvalueincludesassumedliabilities2.DealsinvolvinganIndiantargetand/oracquirer.ExcludesdealswherethetargetparentandacquirerparentaresameNote:Thetotalof2,588IndiaM&Adivestituretransactionsgloballycomprisespending,partlycompleted,completed,unconditional,andwithdrawndealsannouncedbetweenJanuary1,2013,andDecember31,2022,withnotransaction-sizethreshold.Self-tenders,recapitalizations,exchangeo?ers,repurchases,acquisitionsofremaininginterest,minoritystakepurchases(upto49.9%),privatizations,andspino?swereexcluded.Source:Re?nitiv;BCGanalysis2023IndiaM&AReport16IndiaDivestituresoflargeassetsdrivenbylong-termstrategicand?nancialconsiderationsDebtreductionisoneofthebiggestreasonsfordivestmente.g.?JaypeeGroup'sexitfromthecementbusiness.ANNOUNCEDSELLERTARGETACQUIRERDEALVALUE($Mn)DATE?PanaceaBiotec'ssaleofitsdomesticformulationbrandportfolioalignedwithitsplantobedebt-free.CORPORATEDEALS(SelectExamples)2022|May2022|FebHolcimAmbujaCementsAdaniEnterprisesBiocon6,??8ViatrisViatris3,335(BiosimilarsBusiness)DivestmentsbyMNCsaredrivenbyspeci?cstrategicportfolioconsiderationse.g.2022|Mar2022|Dec2022|Feb2022|JunCitigroupCitigroup(ConsumerBanking)AxisBankDalmiaBharatMankind1,629657?Citibank'sexitfromIndiaretailbusinessgivenitshighcompetitiveintensityanditsinabilitytocapturemarketshare.JaypeeGroupJaiprakash(Cement)?Holcim'sdivestmentofAmbujaCementisinlinewithitsglobalobjectiveofsustainability.PanaceaBiotecEssarPowerPanaceaBiotec(DomesticAssets)249EssarPowerTransmissionAdaniTransmission247Note:Thetotalof297IndiaM&Adivestituretransactionsgloballycomprisespending,partlycompleted,completed,unconditional,andwithdrawndealsannouncedbetweenJanuary1,2022,andDecember31,2022,withnotransaction-sizethreshold.Self-tenders,recapitalizations,exchangeo?ers,repurchases,acquisitionsofremaininginterest,minoritystakepurchases(upto49.9%),privatizations,andspino?swereexcluded.Source:Re?nitiv;BCGanalysis2023IndiaM&AReport17Section02WhereWeAreHeaded:ExpectedM&ATailwindsSupply-sidebuild-up,underscoredbyinvestorcautiousnessintoday'suncertainenvironment,islikelytoboostM&Aactivitygoingforward.AttractiveCorrectedvaluationstomorereasonablelevelsseeninpockets,presentinganopportunisticwindowfor"Green"investingisathematicM&Aopportunitytoconsider-increasinglyseeingtractiongloballyaswellasinIspectivebuyerstoexploreinorganicstrategicmoves.2023IndiaM&AReport19IndiaIndianM&Aislikelytobene?tfromasupply-sidebuild-upCashbalanceshavebeenincreasing,whileleverageratiosaredecreasingPE"DryPowder"(forfundsheadquarteredinIndia)hasreachedrecordlevelsin2022AverageD/ERatio(x)Cash&CashEquivalents($Bn)"DryPowder"($Bn)+??%1.51.00.50.025020015010050151054.20020102011201220132014201520162017201820192020202120222010201120122013201420152016201720182019202020212022Cash&CashEquivalentAverageD/ERatioNote:Cashbalancesinclude"cashandcashequivalents"summedupacrossalllistedcompaniesinIndia;VenturefundsincludeallVCstages.Distressedincludesdistresseddebt,specialsituations,andturnarounds.DrypowderbasedonFundManagerlocation–fundswithlocationinIndiaareusedforcalculation;Drypowderrepresentscapitalavailabletofundmanagersforinvestment,i.e.,committedcapitalthathasnotyetbeen"called"forinvestment;~85%offundsinIndiahavenotdisclosedtheir"calledfunds%";forthesefunds,anindustryaverageof~95%isusedasabenchmark"calledfunds%",basisdiscussionwithdi?erentsources.Source:S&PCapitalIQ;Preqin;BCGanalysis2023IndiaM&AReport20GlobalWhileinvestorsentimentisconservative,mostbelievethatnowisthetimetoproactivelypursueportfolio-reshapingopportunitiesandbuildalong-termadvantageInvestorsareholdingontomorecashandvaluinginvestmentsmoreconservatively…1…howeverinvestorsaresupportiveof?nanciallyhealthycompaniesandactivelyreshapingtheirportfolios2ChangesinCapitalAllocationInvestors(%)68%Housingmorecashanddrypowder76%74%investorsbelieveacquisitionsshouldbeactivelypursuedtostrengthenthebusinessatcurrentvaluationlevels.Investingmoreinsectorsandcompanieswithlonger-termstructuralgrowth&tailwindsInvestingmoreinsectorsandcompaniesthatarebene?tingfromthecurrentmacroenvironment73%73%InvestingmoreinsectorsandcompaniesthatareabletopassoncostincreasesthroughpricingChangesinInvestingPracticesInvestors(%)75%Assumingahighercostofcapital80%75%74%72%andadiscountrateinvestorsbelieveexitingordivestinglinesofbusinessesshouldbeconsideredtostrengthentheoverallcompanyinthecurrentmarketenvironment.Valuinginvestmentsmoreconservatively(forexample,bygivingmoreweighttobearishscenarios)InvestingmoreonthebasisofvalueandlessonthebasisofgrowthmomentumSpendingmoretimeoncash?owandbalancesheetconsideration1.Howhaveyourcapitalallocationandinvestingpracticesorrecommendationschangedsincethebeginningofthein?ationaryandrecessionaryenvironment?2.Shouldcompaniesreshapetheirportfolio?Note:Allquestionswereposedwithrespectto?nanciallyhealthycompanies,whichwerede?nedascompanieswithrelativelystrongandresilientfreecash?owandahealthybalancesheet.Source:BCGInvestorPerspectivesSeries,Q12023,February22,2023;n=1502023IndiaM&AReport21GlobalPerformancegapsamongcompaniesgetsampli?edinatoughereconomicenvironmentSalesGrowthandEBITMarginduringdownturn?IncreasingSalesGrowthBESTPERFORMINGCOMPANIESLargedi?erencesobservedbetweenbestandworst-performingcompanies(14pp?di?erenceinrevenuegrowthand7pp3di?erenceinEBITgrowth)inperiodsofslowergrowth.?4%?4%Criticaltoidentifyfundamentallystrongcompaniesexperiencingtemporaryperformancepressuresduetomacro-economicfactors.ShrinkingEBITMarginExpandingEBITMarginBuildingamedium-to-long-terminvestmentthesiscanhelpdiscover"hiddengems".44%2?%WORSTPERFORMINGCOMPANIESFallingSalesGrowth1.AverageacrossthelastfourUSdownturnssince1985;basedonperformancecomparedwithathree-yearpre-downturnbaselineforUScompanieswithatleast$50millioninsales2.Annualizedrevenuegrowthduringthedownturn3.Comparedwiththethree-yearaveragepre-downturnEBITmarginSource:S&PCompustatandCapitalIQ;BCGHendersonInstitute2023IndiaM&AReport22IndiaLower-growtheconomyacquisitionspayo?inthemedium-termCumulativeRelativeTotalShareholderReturnIndex(RelativetoRebalancedMarketIndex)Lower-growtheconomydealsoutperformstrong-growth-economydealsbymorethan18%.105.0DealsOutperformingtheMarket103.0100.0100.5100100:IndexisRelativetotheDealPeriodThebene?tsareevenhigherfornon-coreacquisitions(outsidethebuyer'sindustry).+1?.69?.?Whetheryouareanexperienceddealmakeroranoccasionalacquirer,slowergrowthperiodspresentagoldenopportunitytoinvestinattractiveassetsandextractsigni?cantvalue.??.4T=DateofdealAnnouncementT–3T+3Year1Year2LowerGrowth-EconomyDealsStrongGrowth-EconomyDealsNote:Strong-economy,8.0%(lowgrowth-economy,5.7%)quartersarede?nedinwhichIndia'srealGDPgrowthrateisinthetop(bottom)thirdofallgrowthratesinourobservationperiod(January2000toSeptember2022).Thetotalof570M&Atransactionscomprisespending,partlycompleted,completed,unconditional,andwithdrawndealsannouncedbetweenJanuary2000andSeptember2022withadealvaluegreaterthan$50M.Benchmarkindex=S&PBSESensexindexandNi?y50index(whereBSESensexwasnotavailableasabenchmark).Source:Re?nitiv;BCGanalysis;BCGCaseExperience2023IndiaM&AReport23IndiaCurrentvaluationssuggestthereareattractivepocketsofopportunitytoidentifyandpursuereasonablypriceddealsDealvaluationsaretrackingatlong-termaverageTakeoverpremiumsaretrackingatanall-timelowMedianEV/EBITDAAcquisitionMultiple(x)MedianOne-WeekDealPremium(%)?????????13???????Average??.?Average8.7-3?-??Prospectivebuyersmustactquicklyanddecisivelyasthewindowforsourcingselectassetsatcorrectedvaluationsisshort.Asthelevelofeconomicuncertaintydecreases,valuationswilllikelyrebound.Righttimeforcorporatebuyerstoexplorestrategicdealsandplaceopportunisticbets,whichmayhavebeenheldbackforawhileduetohighlyin?atedvaluationsacrosstheboard.Note:Thetotalof493M&Atransactionscomprisescompleted,unconditional,andpendingdealsannouncedbetweenJanuary1,2005,andDecember31,2022,withno?lterontransactionvaluesandsharetransfers.Self-tenders,recapitalizations,exchangeo?ers,repurchases,acquisitionsofremaininginterest,minoritystakepurchases(upto49.9%),privatizations,andspino?swereexcluded.Onlydealswithadiscloseddealvaluewereconsidered.Source:Re?nitiv;BCGanalysis2023IndiaM&AReport24India"GreenDeals"areemergingasanattractiveinvestmenttheme;thetransitiontocleanenergyisthelargestdriverThevolumeandvalueofgreendealshasincreasedoverthepastdecadeswithasteeprisein2021ThetransitiontocleanenergyisthemaindriverofdealsDealValue($Bn)1NumberofDealsGreenDealsintheAcquirer’sIndustry(%)2765432105040302010050SubjecttoLimitedSampleSize403020100DealVolumeDealValueEnergy&UtilitiesMaterialsConsumerHealthcareIndustrialsTMTFinancials&RealEstate1.Dealvalueincludesassumedliabilities2.PercentageofalldealsintherespectiveindustryNote:Thetotalof466greenM&AtransactionsinIndiacomprisespending,partlycompleted,completed,unconditional,andwithdrawndealsannouncedfromJanuary1,2005,toDecember31,2021,withnotransactionsizethreshold.Self-tenders,recapitalizations,exchangeo?ers,repurchases,privatizations,andspino?swereexcluded.TMT=Technology,Media,andTelecommunications.Source:Re?nitiv;BCGanalysis2023IndiaM&AReport25APAC"GreenDeals"createvaluebothintheshort-termandlong-termwhencomparedtoNon-GreenDealsCompanieswithafocusonsustainabilityareabletocreatevaluethroughmultiplelevers:CAR?Greenvs.Non-Green(2001-2021)Two-YearRTSR2Greenvs.Non-Green(2001-2021)MedianCAR(%)Median?YRTSR(%)Better?nancingaccessandlowercostoffunds(highESGcompaniesenjoy0.5-0.?%lowercostofcapital).2.1x6.5xUpto10%highermarketvaluations(e.g.,investorsarewillingtopayapremiumforrenewableenergyassetsduetoenergytransitionconcerns).1.23?.6?Avoidanceofcarbontaxesandotherregulatoryrisksbyloweringemissions.0.?7Operationalcostsavingsthroughdecarbonization-relatede?ciencygains.0.41?-3%revenueandvolumeupsidepotentialfromproductsmarketedasclimate-friendly.Non-GreenDealGreenDealNon-GreenDealGreenDeal1.CAR=cumulativeabnormalreturn2.RTSR=RelativeTotalShareholderReturnNote:Thetotalof164greenM&AtransactionsinAPACcomprisescompleted,unconditional,andpendingdealsannouncedfromJanuary1,2001,toDecember31,2021.Weincludedonlydealswithatransactionvalueofatleast$100million,asharetransferofatleast50%,andaratioofdealvaluetotheacquirer’senterprisevalueofgreaterthan5%.Self-tenders,recapitalizations,exchangeo?ers,repurchases,acquisitionsofremaininginterest,minoritystakepurchases(upto49.9%),privatizations,andspino?swereexcluded.Onlydealswithadisclosedvalueandreturncalculationswereconsidered.Source:Re?nitiv;BCGanalysis2023IndiaM&AReport26Section03WhatYouNeedtoDo:Call-to-ActionforCEOs,CFOs,andBoardsGlobalUnlockingvaluefromM&Aisnon-trivial:MorethanhalfofM&AdealsdestroyvalueDriversofFailure[%ofdealsanalyzedreducingvalue3]However,whendoneright:46%STRATEGICFINANCIALEXECUTION??%?2%ofdealsaddvalue130%21%18%11%?xvaluewhensuccessful21.Basedonpublic-to-publictransactionsfrom1980to2018.ValuemeasuredasRelativeTotalShareholderReturn(RTSR)foroneyeara?ertheannouncementdate2.Basedonpublic-to-publictransactionsfrom1980to2018.Measuredasone-yearRTSRfortop25%dealsthatgeneratepositiveRTSRcomparedtobottom25%dealsthatgeneratepositiveRTSR3.Morethanonereasonpossible;samplesize=277Source:Re?nitiv;Datastream;BCGTransactionsandIntegrations2023IndiaM&AReport28India"First-time"acquirers-increasinginIndiainrecentyears?atanevenhigherriskof"gettingitwrong"One-yearaverageRTSR1(%)5.3%"Serial"acquirersleveragetheirdealknow-howandintegrationexperiencetogeneratehigherrelativevalue.2.9Establishedcapabilitiestoconductthoroughdiligenceassessmentoftarget.Realistic