Analyze the merger / acquisition deal STERLITE- ASARCO (need to search data from
ID: 2806034 • Letter: A
Question
Analyze the merger / acquisition deal STERLITE- ASARCO (need to search data from website)
1. A brief note about the deal including background of companies involved and their business and product segments.
2. Pain areas of acquiring company due to which the deal was initiated.
3. Areas from where the possible synergies were anticipated at the time of deal.
4. What was the anticipated gain of merger/acquisition?
5. What was the cost paid for the deal? How was it paid (cash or stock or both)?
6. Do you think the deal price was right at that time? Why?
7. If you look at present situation, who do you think was having an advantage (Acquirer or target)?
Why?
8. If you would have been at the place of a key decision maker in the deal from the side of acquirer,
What you would have done different?
Explanation / Answer
1)Sterlite Industries (India) Limited
Sterlite is India’s largest non-ferrous metals and mining company. It has interests and operations in aluminum, copper and zinc and lead, and is a subsidiary of Vedanta Resources plca London-based diversified metals and mining group. Sterlite has copper smelter and refinery operations in India. It’s main operating subsidiaries are Hindustan Zinc Limited ( zinc and lead operations); Copper Mines of Tasmania Pty Limited (copper operations in Australia); and Bharat Aluminium Company Limited (aluminium operations).
Asarco LLC (“Asarco”)
Asarco is the third largest copper producer in the United States of America. Organized in 1899 as American Smelting and Refining Company, Asarco has operated for over 100 years.
It was a holding company for diverse smelting, refining, and mining operations throughout the United States. It's now a Tucson-based integrated copper-mining, smelting, and refining company. The Company operates mines, mills and a smelter in Arizona and a smelter and refinery in Texas.
2) Asarco, formerly known as American Smelting and Refining Company, was put on the block after its creditors and trade unions filed for bankruptcy nearly a year ago.
3)Asarco is a logical and strategic fit with Sterlite’s existing copper business, It is expected to create significant long-term value through leveraging operational and project skills to optimize Asarco’s mines and plants . It also gives access to attractive mining assets with long life and geographic diversification in the North American market. Also provides a stable operating and financial platform for Asarco.
4)The deal has a NPV of $350 million.
As per chegg policy first four sub questions answered.