period of an outbound acquisition was mentioned throughout IFLR’s India
Outbound Investment Forum. Here’s how practitioners recommend
a foreign company is difficult regardless of the jurisdiction. Jai Pathak,
partner at Gibson Dunn said implementing
overseas acquisitions was the easy part.
“The real challenge comes in the aftermath: the post-closing issues,
integration issues, synergistic issues and local compliance issues,” he said.
the transition, Wilton Henriques, executive vice president and global head of
legal, governance and risk at Crompton Greaves, recommended that in-house
counsel consider. “Perhaps too much
time is spent on legal, tax and financial due diligence, and too little time is
spent determining how to extract value from the target,” he said. “The moment
you shift your eyesight to value extraction, this could overshadow other
than focusing on due diligence, Henriques advocated a more commercial approach.
He suggested looking at margins, cash flows and where and how the target’s
portfolio will deliver value. “Look where it is possible to enhance
productivity through labour and plant efficiencies,” he said.
does not mean that due diligence is unimportant. Pathak believed due diligence
was absolutely critical. But he warned there were challenges faced when
carrying it out. “The rest of acquisition issues flow from due diligence,” said.
on labour issues, Vijaya Sampath, ombudsman of Indian conglomerate Bharti Group
and senior partner at Lakshmikumaran & Sridharan, said it was about
managing differences. She said
that it was important to define objectives clearly before a company goes into a
deal, and at that time it will understand if it needs to send anyone after the
acquisition. She emphasised that it is very important to give a clear message
to the existing management on future plans.
also advocated adapting to local conditions. She recommended having an overall
framework for compliance, processes and systems, but to be clear that it is
necessary to adapt to each country depending on local laws and regulations.
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