Case Studies and Management Resources
Asia's Most Popular Collection of Management Case Studies |
 |
Case Studies and Management Resources
Asia's Most Popular Collection of Management Case Studies |
|
 |
The process of consolidation started in 1998 with ICL taking over Visaka Cement and CCI's plant at Yerraguntla, (Andhra Pradesh) and Grasim taking over Dharani Cement and Shri Digvijay Cements. Also, in 1998, Lafarge, a French building material multinational took over Tata Iron and Steel Co's (Tisco) 1.7 mtpa plant. (Refer Table II for major deals in 1998-99). The main reason for the sudden spate of acquisitions was that overcapacity had squeezed margins, making it impossible for the smaller, inefficient players, especially in the north and west, to carry on with their operations.
The Takeover of RaasiBy January 1998, Srinivasan had accumulated 18.03% of Raasi's equity, both through open market purchases as well as by buying out the stake of an estranged faction of the Raju family. In February 1998, Srinivasan announced an open offer to acquire an additional 20% of Raasi's equity. |
Srinivasan was also negotiating with V.P. Babaria, a transporter for both ICL and Raasi, to pick up his 7% stake in the latter. If Babaria sold his stake, ICL's stake in Raasi would go up to 28.56%. With more than 25% of Raasi's equity in his kitty, Srinivasan would be in a position to veto any special resolution put up for the approval of Raasi's shareholders.
A confident Srinivasan told Business Today in Chennai: "Raju cannot wish me away and that's irrespective of the response ICL will elicit for its public offer, which will be open between April 15 and May 15, 1998."
Unwilling to take any chances, Raju planned to execute a series of defensive manoeuvers to stall Srinivasan. Raasi could get its shareholders to approve the hiving-off of the 39.5% stake it owned in SVCL. But this could be opposed by the financial institutions as Raasi had promised BIFR9, while taking over the sick company, that it would not dispose of the shares.
9] Board for Industrial and Financial Reconstruction.
Case Code : BSTR001
Themes: Mergers Acquisition and Takeovers
Case Length : 8 Pages
Period : 1998-1999
Organization : Raasi Cements Sri Vishnu Cements Limited
Pub Date : 2001
Teaching Note : Available
Countries : India
Industry : Construction - Building Materials & Equipment
Business Strategy
Finance
HRM
Insurance
IT and Systems
Marketing
Operations
Leadership
More Case Studies >>
Business Environment
Business Ethics
Business Strategy
Human Resource Management
IT and Systems
Marketing
Operations
Micro Case Studies >>
Micro Case Studies
Case Studies
Articles
Interviews
Book Reviews
Glossary
Online Quiz
More Free Resources >>
Best Selling Case Studies
Business Case Studies
Learning With Case Studies
Cases Used in Textbooks
Prize Winning Case Studies
Business Updates
More Case Studies >>