The financial crisis is changing the landscape for big-ticket mergers and acquisitions.
“The easy monetary expansion of 2006 is history and capital will be scarce,” Tata Steel group chief financial officer Koushik Chatterjee cautioned, on the sidelines of the 10th Sir Jehangir Ghandy Memorial Lecture organized by the Calcutta Management Association (CMA).
Chatterjee would know. He played a critical role in the $12 billion acquisition of Corus Group in 2006-07. But that was a different time. “2010 and ahead is a very different time. Integration challenges also need to be looked into, given the global economic crisis,” explicated Chatterjee.
Integration remains one of the key challenges in a cross-border acquisition and the CMA panel that discussed the challenges of global acquisitions, was unanimous on it.
“Around 50 per cent of acquisitions succeed and 70 per cent of the failed deals are on account of post-merger integration issues,” executive director Deloitte Joydeep Datta pointed out. Tata Steel has achieved its target of synergies of $450 million with Corus, Tata Steel managing director, H M Nerurkar said, while delivering the Jehangir Ghandy Memorial Lecture.
TNT opted for a customer-focused strategy and integration when it took over Speedage Express, said Abhik Mitra, managing director, TNT India.
