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14:00/15:15- Panel 2

Mergers & Acquisitions betweenMergers & Acquisitions betweenIndia and EuropeIndia and Europe




2

Mergers & Acquisitions betweenMergers & Acquisitions between

India and EuropeIndia and Europe

Chairperson:Chairperson: R. SANKARAN,R. SANKARAN, Advisor,Advisor,

Rothschild IndiaRothschild India

Sanjay BHANDARKAR,Sanjay BHANDARKAR, Managing Director,Managing Director,

N M Rothschild & Sons (India)N M Rothschild & Sons (India)

Kalpesh KIKANI,Kalpesh KIKANI, Senior General Manager,Senior General Manager,

ICICI BankICICI BankTim THOMAS,Tim THOMAS, Chief Operating Officer,Chief Operating Officer,

Bharti AXA Life Insurance Co.Bharti AXA Life Insurance Co.

14:00/15:15- Panel 2



3

India – Europe ConnexionIndia – Europe Connexion

Sanjay BHANDARKAR

Managing Director N M Rothschild & Sons (India)



4

GDP Growth rate amongst the highest

in the world Clocked at 8.4% last year and estimated

c.9 % for the current year

5th largest nation in the world in PPPterms (€ 3tn)*

Per Capita GDP (PPP) : € 2,720*

Growth spurt led by manufacturing andservice sectors

Highest FII inflow amongst emergingAsian economies in CY06 (€ 6.2bn)

FDI Inflows at € 5.5bn in FY 06 (40%

YoY growth) Among the four fastest developing BRIC

economies in the world

Population of over 1bn with 54% lessthan 25 years old

India – An Overview India – An Overview

Note * - As of 2006 est



5

0

100

200

300

400

500

May-

97

Aug-

98

Nov-

99

Feb-

01

May-

02

Aug-

03

Nov-

04

Feb-

06

May-

07

BSE Sensex Dow Jones FTSE 250

Has one of the most developed capital

markets among emerging countries Only BRIC country with Market Cap.

higher than GDP

115 companies with a Market Cap.greater than €1bn (As of 15th May 2007)

Substantial PE interest Indian corporates have made aggressive

cross-border acquisitions backed by

Funding from investors, hedge funds andbanks

Government pursuing progressiveliberalization and easing of FDI norms

100% FDI allowed in most infrastructuresectors

India – Developed Capital Market India – Developed Capital Market Capital markets

- 1 2 3

Hongkong

Germany

Australia

Brazil

Russia

Poland

UK

USA

India

China

Confidence

Foreign attractiveness

Source A T Kearney Study 2005

Source Rothschild analysis

Note Indices rebased to 100



6

“The Indian Multinational”

A steel company in UK, an oil & gasexplorer in Norway, a generic drugmanufacturer in Germany; all haveone thing in common - they are allflying the Indian tricolor

Value of outbound deals larger than

inbound In Jan-March 2007, 40 out-bound

deals with a total value of € 15bn

Led by Tata-Corus, Hindalco-Novelis, Aban-Sinvest

Companies looking to expand their product portfolio, access newmarkets, technologies

From regional to global player

Indian Companies Going Abroad Indian Companies Going Abroad



7

Indian companies on a massive

acquisition spree in past 2 years Led by Iron and Steel, Energy and

Pharmaceutical sectors

More outbound deals than inbound

deals in 2006 in value terms Largest portion of outbound

acquisitions in Europe (42%) followedby North America (24%)

Tata – Corus deal represents largestever acquisition by an Indian company

Indian Acquirers – European TargetsIndian Acquirers – European Targets

197845

126

2,116

9,707

17

30

51

72

18

0

2,000

4,000

6,000

8,000

10,000

12,000

2003 2004 2005 2006 2007

€ m

20

40

60

80

Value of Deal (€ m) Number of Deals

Source: Thomson Financial

Note:1) 2007 figures are YTD

2) All completed Deals only



8


Sectoral Split

Source: Merger Market, Rothschild analysis

Note:1) Includes all announced deals from 2004 till 2007 YTD

2) Excludes Tata – Corus deal

Iron & Steel

Tata’s € 9.5bn acquisition of Corus GroupPLC

Energy

Aban Offshore’s € 1.1bn acquisition of Sinvest ASA, an oil & gas E&P company

Suzlon Energy is currently in the processof acquiring German based REpower Systems

Has placed a competitive bid of € 710m

Pharma & Biotech

Dr. Reddy’s € 577m acquisition of

German pharma major betapharm GmbH

Ranbaxy Laboratories acquiredRomanian based Terapia SA for € 270m

Others

7%

Consumer

10%

Auto & Auto

Comp

8%

Chemicals &

Materials9%

IT & ITeS

8%

Pharma &

Biotech

25%

Energy

33%



9


Top 10 Deals (2005 – 2007YTD)

Year Target Country Acquirer Deal Value(€ m)

2007 Corus Group PLC UK Tata Steel 9,466

2007 Sinvest ASA Norway Aban Offshore 1,072

2007 REpower Systems Germany Suzlon Energy 710

2006 betapharm GmbH Germany Dr.Reddy's 577

2006 Terapia SA Romania Ranbaxy Laboratories 270

2005 Thomson SA France Videocon 240

2005 Docpharma NV Belgium Matrix Laboratories 191

2006 ITERA Group (25%) Russia Sun Capital Partners 158

2005 Brunner Mond (64%) UK Tata Chemicals 156

2006 Pinewood Laboratories Ireland Wockhardt 118Source: SDC, Merger Market, Rothschild analysis



10

European investment in India

constantly on the rise Majority of inbound investments seen

in Telecom, IT and Financial Servicessectors

Vodafone’s recent acquisition of Hutch’s 67% stake in Hutchison Essar

Largest ever acquisition by a foreigncompany in India

European Acquirers – Indian TargetsEuropean Acquirers – Indian Targets

Source: Thomson Financial

Note:1) 2007 figures are YTD

2) All completed Deals only

379

2,620

895

1,466

16,578

70

53

92

121

55

0

3,000

6,000

9,000

12,000

15,000

18,000

2003 2004 2005 2006 2007

€

m

0

40

80

120

160

Value of Deal (€ m) Number of Deals



11

Sectoral Split

Source: Merger Market, Rothschild analysis

Note:1) Includes all announced deals from 2004 till 2007 YTD

2) Excludes Vodafone – Hutchison Essar deal

Telecom

Vodafone’s € 10.5bn announcedacquisition of Hutch’s 67% stake inHutchison Essar

In 2005, Vodafone also picked up 6%stake in Bharti Airtel for € 686m

Mining

UK based Vedanta Resources’ recentannounced acquisition of 71% stake inSesa Goa for € 972m

Cement

Swiss cement major, Holcim picked up

20% stake in Gujarat Ambuja Cement for € 466m


Transport

3%

Cement

23%

IT& ITeS

7%

Chemicals &

Materials

6%

Consumer 13%

Mining

24%

Others

7%

Telecom

17%



12

Top 10 Deals (2005 – 2007YTD)

Source: SDC, Merger Market, Rothschild analysis

Note *- Through its Indian Subsidiary, Mysore Breweries


Year Acquirer Country Target Deal Value

(€ m)

2007 Vodafone Group PLC UK Hutchison Essar (67%) 10,507

2007 Vedanta Resources PLC UK Sesa Goa (71%) 972

2005 Vodafone Group PLC UK Bharti Airtel (6%) 686

2006 Holcim Ltd Switzerland Gujarat Ambuja (20%) 466

2005 Michael Huber Muenchen Germany Micro Inks Ltd (71%) 246

2004 Hewlett-Packard Leiden Netherlands Digital Globalsoft (49%) 245

2005 Holcim Ltd Germany Ambuja Cement (67%) 182

2005 SABMiller PLC* UK Shaw Wallace 108

2006 Ciments Francais France Zuari Cement (50%) 100

2004 DHL Worldwide SA Belgium Blue Dart (68%) 97



13

Cross border activity on a continuous rise

Number of cross border deals increased from 60 in 2004 to 266 in 2006 A significant proportion of M&A activity (in terms of volume) was done by mid cap

companies

Number of Indian companies that are able to do major acquisitions abroadis growing constantly

In the first few months of 2007, Indian M&A crossed € 26bn led by large capcompanies like Tata, Suzlon, Hindalco (Birla group)

Easy availability of debt for acquisition financing

Inbound acquisitions constrained by limited availability of high qualitycompanies

In ConclusionIn Conclusion



14

Advised Tata Steel on € 9.3bn acquisition

of Corus Group Advised Dr Reddy’s € 577m acquisition of

betapharm

Advised Azure on € 113m sale to SubexSystems

€ 1.4bn Dabhol power project Daewoo automobile plant in India

Air Deccan, first Indian LCC

Radio Mirchi, first private FM channel

Radha Krishna Foodland, first fooddistribution deal

Lanco Amarkantak power project, firstcoal based IPP in India

Rothschild India OfficeRothschild India Office

Entertainment

Network (I) Ltd.

Financial Adviser on fundraising

2002 2004

Foodland

US$25m private equityinfusion from Warburg

Pincus

Advised on induction of financial partners in 600

MW coal basedAmarkantak Power Project

2006

Lanco Group

Air Deccan

Raising US$40m privateequity from ICICI Ventures

and Capital International

20052005

ICICI IDBI EXIM

Advised Indian Lenders toDaewoo Motors (India) onthe monetisation of assets

ICICI, IDBI, SBI

US$1.9bn disposal of assets of Dabhol Power

Company to Ratnagiri Gas& Power Pvt Ltd (a JV

between NTPC and GAIL)

2005

2007

Tata Steel

Advised on US$ 11.9bn

acquisition of Corus Group

plc

2006

Dr. Reddy s Laboratories

Advised on the US$576macquisition of Betapharm,

Germany

2006

Azure Solutions

Advised controllingshareholders on their US$

140m disposal of shareholding to Subex

Systems through a GDRissuance



15

14:00/15:15- Panel 2





16

India-Europe M&AIndia-Europe M&A

Kalpesh KIKANI

Senior General Manager ICICI Bank



17

Agenda Agenda

M&A activity in India

Trends in Indian outbound M&A

Considerations in European deals



18

Increased corporate activity Increased corporate activity

Indian corporates aspiring to become market leaders in their

business segments not only in India but also globally Growth drivers

Strong growth in demand leading to increased utilisation of existing capacity

Product portfolio and service offering enhancementAccess to new technology and markets

Derisking the business

…aided by easier access to capital supply…



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Increased access to capital Increased access to capital

1,7502,000

7,500

0

2,000

4,000

6,000

8,000

CY 2004 CY 2005 CY 2006

P E F u n d i n g ( U S D

m n

4,045

4,8645,386

0

2,000

4,000

6,000

CY 2004 CY 2005 CY 2006

P u b l i c I s s u e ( U S D

m n

5,228

8,54

13,45

0

3,000

6,000

9,000

12,000

15,000

FY 2004 FY 2005 FY 2006

E C B / F C C

B i s s u e ( U S D m n )

459 613

2,55

0

500

1,000

1,500

2,000

2,500

3,000

FY 2004 FY 2005 FY 2006

A D R / G D

R i s s u e ( U S D m n )

…reflecting in the sharp increase in M&A activity in

the recent past …

Private Equity Domestic Public issue

ADR/ GDR issue ECB/ FCCB issue



20

2.71.5

2.77.4 9.4

25.9

0.10.6

1.7

4.4

21.2

38.4

3.93.2

3.9

10.7

16.8

28.4

Inbound Outbound Domestic

1,028.1 1,087.41,628.2 1,976.8

3,935.0 4,520.0

0.7%0.5% 0.5%

1.2%

2.1%

1.2%

1.0

10.0

100.0

1,000.0

10,000.0

2002 2003 2004 2005 2006 2007*

0.0%

1.0%

2.0%

3.0%

Total Value of Global Deals % Share of india

USDbillion

ShareofIn

diainglobalmarket

M&A activity in IndiaM&A activity in India

• Value of Indian deals grew at a CAGR of 140 % from USD 8.3 bn in CY04 to

USD 47.4 bn in CY06

•ICICI Bank was involved in USD 16.5 billion worth of deals in CY06

• Outbound M&A deals till March was USD 8.8 billion in 2007• Estimated total outbound M&A projected to be more than USD 35.0 bn in 2007

• This appears to be just the beginning of the M&A wave in India

* 2007 figure is estimated

Source : Bloomberg



21

India-Europe M&AIndia-Europe M&A

• Europe represents the region with the largest number of acquisitions from

India

Break-up by Value

36%

45%

15% 4%

Americas Europe Asia-Pacific Africa/Middle East

Break-up by No of Dea

37%

41%

6%

16%

Americas Europe Asia-Pacific Africa/Middle Eas

• India’s share of outbound deals originating from Western Europe has

increased from 5.0% to 8.5% between CY04 and CY06• In value terms it has increased from USD 0.7 billion (CY04) to USD 3.1 billion

(CY06)

22



22

Agenda Agenda




23



23

Explosive growthExplosive growth

India's M&A has grown by 150%, next only to France and Hong Kong, each of which achieved more than 200% growth

More than 80% of large Indian companies are exploring the M&A option togrow

India is second largest investor in the UK, with investments of around USD 2.0billion (2005 - 2006)

Notable Deals in Europe

Aban Offshore acquires Sinvest, Norway for USD 1.3 billion (2007)Tata Steel acquires Corus for USD 12.8 billion (2006)

Ranbaxy acquires Terapia for USD 324.0 million

Suzlon acquires Hansen, Belgium for USD 565.0 million (2006)

Dr Reddy's Lab. acquires Betapharm for Euro 480.0 million (2006)

Reliance acquires Flag Telecom for USD 207.0 million (2003)

Tata Tea acquires Tetley Tea for USD 430.0 million (2000)

24



24

Increasing leverageIncreasing leverage

0,00

1,00

2,00

3,00

4,00

5,00

6,00

2002 2003 2004 2005 2006

Total Debt on target/EBITDA levels increased from 4.93 (2005)to 5.28 (2006)

Senior Debt/EBITDA levels also increased from 3.92 (2005) to4.21 (2006)

D e

b t / E B I T D A

Target Debt/EBITDA levels in Western Europe

25



25

Pricing Trends (W Europe)Pricing Trends (W Europe)

Source : LoanConnector

Downward trend in Average Margins

Average Margins in 2006 : 238 bps (247 bps in 2005)

26



26

Agenda Agenda




27



27

Key considerations in deal structuring Key considerations in deal structuring

From a lender’s perspective

Key challenge is to get direct access to cashflows/assets of target (based in Europe)

Regulations differ across countries in Europe

UK has a whitewash procedure

Such is not available in other geographies

28



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Financial Assistance in EuropeFinancial Assistance in Europe

Country Belgium France Germany Italy Netherlands Spain

Financial

AssistancePermitted?

No No No No No No

Exceptions?

Very limited,none relevant

Refinancingmay be OK if entirelyseparate

None None for AG &subsidiaries

Other commonforms of entity(e.g. GmbH) notcovered

None relevant

Merger withtarget may beallowed

None for NV or subsidiaries

BV can give loansup to distributablereserves

None relevant

29



29

Key messagesKey messages

Indian clients are increasingly looking at acquisitions for growth

The confidence level has increased and these companies are notshying away from acquisitions of much larger companies

Requirements of Indian clients are not necessarily same as for corporates in other geographies

Hence, solutions need to be tailored for Indian requirements

All key decision makers in ICICI Bank are based in Mumbai, therebyenabling quicker turn around in case of last minute changes instructure/ quantum of financing

ICICI Bank knows the people who are driving the acquisitions inIndia and thus in critical situations has the ability to look beyond

numbers

30



30

Recent TransactionsRecent Transactions

Acquisition Hansen

Technologies

USD 565 million

Structuring &

Financing

Acquisition of 30%stake in Energy

Brands Inc.

USD 712 million

Structuring and LeadArranger

Acquisition of

Thomson SA’s CPT

plants

USD 283 million

Structuring &

financing

Acquisition of

Carbogen Amcis

USD 75 million

Structuring &

Financing

Acquisition of

West Asia Drilling N.V.

USD 33 million

Structuring &

Financing

Acquisition of

Amann Holdings

Euro 35 million

Lead Arranger

Acquisition of

Pinewood

USD 118 million

Sole advisor and

arranger

Acquisition of

Sinvest A.S.A

USD 800 million

Structuring &

Financing

31



31

Recent TransactionsRecent Transactions

Acquisition of

Keyline Brands

GBP 18 million

Sole Arranger

Acquisition of 20.2%

stake in Great Lakes

Carbon, US

USD 101 million

Sole advisor andarranger

Acquisition of Typhoo Tea

GBP 80 million


Acquisition of Typhoo Tea

GBP 80 million


Acquisition of spiritsbusiness of

Shaw Wallace

USD 300 million

Advisor

Acquisition of spiritsbusiness of

Shaw Wallace

USD 300 million

Advisor

Acquisition of a

South African tyre

manufacturer

USD 62 million

Guarantee facility

Acquisition of

Tashkent Toytepa

Textiles

USD 103 million

Structuring &

Financing

Acquisition of DCS

Software

GBP 12 million

Sole Arranger

Employee buyout of

Tata Tea plantations

USD 13 million

Advisor

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32

Thank You

33



33

14:00/15:15- Panel 2



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34

Indian Market Entry ExperienceIndian Market Entry Experience

Tim Thomas

Chief Operating Officer

Bharti AXA Life

Mumbai

Wednesday, May 16, 2007

351 0 M k t t h d h1 0 M k t t h d h



1.0 Market entry - a phased approach1.0 Market entry - a phased approach

• Pre- launchand the 'start-up' phasepreparation

• Regulatorylicenseapprovals

• Launch comms• Manpower

recruitment• Sales forcetraining,compensationandrecruitment

• Launch salesincentiveprograms/KPItracking

• Leadgenerationmanagement

• Establish JVcommittees

• Establish theviability of commencing aproject to detailIndia marketentry

• Confirm scope,plan, anddeliverables

• Draft criticalsuccess factors

• Agree projectgovernance

• Desk top dataresearch

• Initial view of potential inmarket

• First filter of

potentialstrategicpartners

• Strategyformulation for market entry intoIndia and detailedbusiness caseexamining viableentry options

• Assess criticalsuccess factorsfor entry options

• Evaluate potentialpartners interestand suitability anddefine preferredpartner list

• Joint Venture andstructuring options

• Evaluation of entry modeloptions andoptimal businessmodelrecommendation

• Financialmodelling andhigh levelbusiness case

• Finalise partner negotiations, JVstructuring andpreparation of legal agreements

• Detailedoperational design(partner specific)

• Marketing plan•

Implementationplanning covers:process, systems,infrastructure andback office,branch roll-out

• Business planningand financials

• Reporting andgovernance

• Appoint keyexecutives

• Establish aproject team on theground in India,consisting of AXAsecondee, advancehire, implementationpartners andexternal resources

• Finalise partner selection for

Management Boardendorsement

• Develop regulatoryrelations

• Develop high leveltarget operationalmodel

• Finalise advancehires short list

Phase 1

Desk top analysis

Apr-Jul 2004

Phase 2

Strategy & business case

Aug-Dec 2004

Phase 3

Partner selection

& planning

Jan-May 2005

Phase 4

JV execution and operational

design

Sep 05-Mar 06

Phase 5

Implementation

Oct ‘05-Aug 06

Launch

Aug ‘06

36



Thank youThank you

37



14:00/15:15- Panel 2



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