Conglomerate diversification through cross-continent acquisition: Vedanta weds Cairn India

Abstract

Subject area corporate policy and strategy – mergers and acquisitions. Study level/applicability Post graduation (MBA and other management degrees). It includes courses on Strategic Management, Business Environment and International Business. Case overview Markets are becoming highly connective, accessible and communicative and reaching maturity at a very high phase. Acquisition is a choice to enhance the emerging and diversified markets. This case paper presents insights on Vedanta – Cairn India cross-border acquisition deal in Indian oil and exploration industry. This case synchronizes the gap between strategic planning and outcome of actions. The study exclusively evidences the reaction of stocks of all attached parties against acquisition announcement and compares with market performance. Expected learning outcomes Strategic mapping of business negotiations, while in-organic choices, further the impact of economic, political, legal and regulatory factors on cross-border mergers and acquisitions (M&A), deliberate deal financing mechanism and leadership diplomacy. It proposes from the viewpoint of corporate in-organic alternatives and to strengthen the upcoming research field of strategy & policy. Supplementary materials Global M&A market, shareholding pattern, income statement and balance sheet of Cairn India Ltd, financial figures of Vedanta Resources, tabular data on stock and index performance, deal structure and teaching note.

Extant reviews on entry-mode/internationalization, mergers & acquisitions, and diversification: Understanding theories and establishing interdisciplinary research

“…To achieve this, social science scholars frequently use case study research as a better framework, which enables both rigor and generalization [204]. Although the case method has been underutilized in management and international business strategy [154], it has a number of merits compared to case writing and publishing for teaching needs (e.g., [134,158]). Conversely, defining an appropriate research design and choosing a better method is one of the critical components in scholarly research [150].…”

Axis–Enam: The Investment Banking Marriage—Will They Produce Superior Cash Flows?

“…More possibly, these issues may pull the deal backward especially in countries like India, and if the deal gets delayed that would annoy the acquirer and target firm. Students are suggested to read, analyse and discuss the relevant cases such as Vedanta–Cairn India delayed deal (Nangia, Agarawal, Sharma & Reddy, 2011), Bharti Airtel–MTN broken deal and Vodafone–Hutchison tax litigation deal (Reddy, Nangia & Agrawal, 2012, 2014).…”

Why Do Cross-Border Merger/Acquisition Deals Become Delayed, or Unsuccessful? A Cross-Case Analysis in the Dynamic Industries

“…The basic unit of analysis aims to capture the causes behind 'delayed and unsuccessful cross-border inbound acquisitions in emerging markets setting'. Thus, cross-border inbound cases connected to India are (i) Vodafone acquisition of Hutchison for US$11.2 billion in 2007 (Reddy, 2015b;Reddy et al, 2014a), (ii) unsuccessful cross-border merger between Bharti Airtel and MTN for US$23 billion in 2008-09 (Reddy et al, 2012), and (iii) Vedanta Resources acquisition of Cairn India for US$8.67 billion in 2010-11 (Nangia, Agarawal, Sharma, & Reddy, 2011). In other words, two cases were representing telecommunications industry and remaining case was describing oil and gas exploration industry.…”

“…Captivating this, we presented the case analysis in different streaks include strategic motives of the acquisition and the reasons behind the delayed deal. Prior to look into the case analysis, it is our primary guideline in which we have analyzed the case based on published case (Nangia et al, 2011), direct observations through media texts around the announcement and extant literature on cross-border acquisitions.…”