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Global Diversification is the process of spreading out a companys

investment capital between a mix of financial instruments & firms


This strategy has been widely used for many years as a good

method for managing the risks associated with investing


A global investment provides the opportunity to increase wealth,

manage risk & allow firms to increase their productivity &


employment opportunities
A few decades back, not so many traditional companies across

the world were into global diversification of their investment


portfolios
With the world economys rise and fall, going global had

cushioned those companies who would have otherwise suffered


greater losses from a sudden market downturn
Even amidst the world financial crisis, a global diversification can

provide room for growth on the companys products & services


When the world economy is on an ever-evolving plane, the

company must review all social, economic & political factors that
might affect its investment in a certain country

Making foreign investments may lead to

phenomenal success, especially when made


in foreign emerging markets. Investments in
mutual funds may vary in performances, but
there are reasonably lesser risks in losing the
principal the company had invested
Global diversification contributes to the
advancement in information technology,
opening the doors for global development of
multinational companies. With the exchange
of investment comes an exchange of
knowledge as well

Global investments help abolish stringent

foreign exchange control & assist in the


deregulation of the financial system in many of
the major first-world countries. This can allow
flexibility in trade & more room for small league
players to enter the global market industry
Doing business globally have helped stabilize
the interdependency of foreign markets, building
stronger economic ties among tiger economies
& developing countries. A good example of this
correlation is when the US stock market had
been halted due to the 9/11 attacks. This event
had indeed affected the world trade & stock
markets at that time

Too much interdependency can sometimes cause a

ripple effect that affects one country to the other,


specially when many developing countries rely heavily
on the US Dollar for its market stability
Global diversification had a major impact in the US
housing industries, where sales and prices are sinking
way beyond rock bottom
Global investments have created a chain reaction of
unfortunate events, where many companies outsource
their workforce to cheaper countries, while many are
losing jobs back home. The demand for the cheapest
labor had become a rave in todays dwindling economy
Global diversification had placed mortgage firms under
fire, where many consumers are forced to seek
refinancing to avoid foreclosures, and many have
stopped making timely mortgage payments due to
financial troubles

Mergers & Acquisitions are practically called


by various names as:purchase or merger or amalgamation
or
acquisition or takeover or absorption
or
spin-off or slump-sale or distress-sale
corporate restructuring or
external reconstruction or
internal reconstruction or
joint venture

Some mergers become successful while some remain

unsuccessful
Mergers and Acquisitions have been resorted to by many
companies as a strategic choice to restructure or reengineer
their businesses
Today, the need is for better products with better technologies
but with a cheaper price
Every company wants to achieve the economies of scale by full
utilization of its capacity and also to capture more and more
market share
Every company wants to be a market leader or sustain its
position, produce better quality products and sell larger units:With less cost
Less people
In less time and efforts
With least competition
Expand the geographical Market Share

Increase in
stake or control

Direct
increase
Acquisition of
shares

Passive
increase
Preferential
allotment of
shares
Capital reduction
of identified
shares
Share buyback

Business
restructuring
Merger
Demerger
Sale of business
undertaking/
sale of assets
Amalgamation
Absorption

Top Priorities for M&As


Monitor the Pace
Define Firm Goals
Align with Growth Strategies
Identify the Right Targets
Do Specific Commercial Due Diligence
Identify Any Weaknesses Through Due Diligence
Accelerate Integration to Boost Stake Holders

Confidence
Develop Sound Operations Strategies
Define the New Supply Chain Organization
Set Integration of Processes and Technologies
Validate Market Perception

Increased M&A activity from emerging-market

buyers is increasing competition & raising the


prices for the best targets in both emerging &
developed markets
The western methods of valuation & due diligence
may not be flexible enough for evaluating
emerging-market targets
As emerging-market contenders become
increasingly assertive deal makers, it becomes
more important to understand their strategic intent
A companys strategic planning process will need
to be more global in reach & must ensure that
industry-changing scenarios are fully considered

Recognizing the power of emerging &

developing markets
Care of various stakeholders interests
Collaborative approach
Due Diligence

Company Law Issues

SEBI Issues

Accounting
Treatment

FEMA Issues

Legal & Regulatory


Framework

Mergers &
&
Mergers
Acquisitions
Acquisitions

Identifying & Delivering


Synergies

Tax Regimes & Treaties