These two acquisitions were the cynosure of all eyes in the past years. Is the world looking at these big-ticket acquisitions with the same respect? I doubt it.
Corus to me is the first thing that went wrong for Tata group. It paid a huge amount for acquiring and then you know some thing called a recession hit. This was India’s broadcast to the world that we have arrived on the M&A scene.
But the acquisition went wrong and signaled the events to come for Tata. I also wanted to include Tata’s Jaguar and Land Rover to the list but that would be too much to handle. Both Corus and JLR has hit Tata so hard that it will be in debt for quite some time. I almost forgot about the Nano saga.
Ranbaxy once again is the inward transaction where a Japanese company (Daiichi) bought over an Indian company. This time it is not the Indian company, which is in trouble, but the Japanese company. Singh brothers made their money though. Kudos to them. May be they need to write a book about it. That would be the most read book after Ramalinaga Raju’s – How-to cook.
Ever since the acquisition was complete all kinds of problems started to come up with Ranbaxy. Daiichi even left Singh control of the company as CEO after the acquisition. But, he left the company and left the company worse off. Ranbaxy has pulled Daiichi’s bottom line. Now, that hurts.
The plummeting share prices and the FDA probe are weighing the company down and Daiichi might come open and say that Ranbaxy was a mistake or even better – we screwed up.
We saw one outbound that of Corus from Tata and one inbound that of Ranbaxy. Both of these are not what they were supposed to be. May be it is too soon to judge? And that’s a may be. But, right now these are disasters for the respective companies.
[…] the Daiichi-Ranbaxy deal, the Japanese company benefited from Ranbaxy’s low-cost manufacturing infrastructure and its […]
No I don’t think the deal went wrong, when deal was done the market was at peak and when it actually implemented the market was going down moreover it is early to comment anything as time is changing and who knows we see some thing in favor of two deals.
In both cases, companies tried to pick value (if there was any) in sick companies. Corus/JLR was going kaput and TATA thought it will allow to increase its footprint in developed world. Same with Daiichi they wanted generic brand to establish themselves in US.
one thing that M&A guys failed to understand (at least in these two cases) is there is no value for the price they paid. time will tell what happens, keep watching