SHIVA Capital has developed a Mergers & Acquisitions practice that is unique among the world's top M&A advisors by its focus on covered industrial segments and international markets, becoming an acknowledged specialist for in- and outbound transactions between Germany on one hand and Russia, India and China on the other hand.
Over the last five years we have managed to position ourselves as a preferred partner for Russian, Indian and Chinese industrial players to get a footprint in Germany and Europe. At the same time we have been able to advise and accompany the “German Mittelstand” in entering the promising markets of Russia, India and China, either by acquiring or partnering.
SHIVA Capital executes innovative and customized solutions to complex assignments, such as acquisitions, divestures, mergers, joint ventures, restructuring, spin-offs, leveraged and management buyouts, private equity investing, special situations and shareholder and government relations.
Whether in advising one of the largest automotive supply groups in India on a complicated acquisition in Germany, the Russian developer with a 1,5 Mio € project in Moscow in equity and debt financing or a major textile conglomerate to enter the European apparel market by acquiring a retail chain, SHIVA Capital applies its collective expertise garnered across industries, regions and products, bringing innovation, solutions and creating value in each one of our transactions.
The dominant rationale used to explain Mergers & Acquisitions is that the acquiring firms seek improved financial performance. The following motives are considered to add shareholder value:
Synergy: This refers to the fact that the combined company can often reduce duplicate departments or operations, lowering the costs of the company relative to the same revenue stream, thus increasing profit.
Increased Revenue/Increased Market Share: This motive assumes that the company will be absorbing a major competitor and thus increase its power (by capturing increased market share) to set prices.
Cross Selling: For example, a bank buying a stock broker could then sell its banking products to the stock broker's customers, while the broker can sign up the bank's customers for brokerage accounts. Or, a manufacturer can acquire and sell complementary products.
Economies of Scale: For example, managerial economies such as the increased opportunity of managerial specialization. Another example are purchasing economies due to increased order size and associated bulk-buying discounts.
Taxes: A profitable company can buy a loss maker to use the target's loss as their advantage by reducing their tax liability. In the United States and many other countries, rules are in place to limit the ability of profitable companies to "shop" for loss making companies, limiting the tax motive of an acquiring company.
Geographical or other diversification: This is designed to smooth the earnings results of a company, which over the long term smoothens the stock price of a company, giving conservative investors more confidence in investing in the company. However, this does not always deliver value to shareholders.
Resource transfer: resources are unevenly distributed across firms) and the interaction of target and acquiring firm resources can create value through either overcoming information asymmetry or by combining scarce resources.
Vertical Integration: Vertical Integration occurs when an upstream and downstream firm merge or one acquires the other. There are several reasons for this to occur. One reason is to internalize an externality problem. A common example is of such an externality is double marginalization.
For more information on “Mergers & Acquisitions” as well as "Project References" please contact us!
