Squandermania Mentality: the Root Cause of Social Evil

SQUANDERMANIA MENTALITY: THE ROOT CAUSE OF SOCIAL EVIL UDEKE CHARLES NDUBUISI POPE JOHNPAUL 11 MAJOR SEMINARY, AWKA [email  protected] com PREAMBLE Nigeria as a nation is ravaged by many internal problems. It is no longer news even to the blind that things are not the way they should be in our society. Nigeria problem is hydra-headed. Many scholars have viewed it from the different perspective as corruption, problem of leadership, indiscipline, greediness, consumerism, et cetera. Squander mania mentality is not out of the list. The rate at which people spread dollars at occasions is quite embarrassing.The history of Nigerians is that of a people in search of naira and the ostentatious show of wealth. Some people construe squandeermaniarism as a means of ascertaining themselves in the society. So, the more ostentatious you are, the more you are socially recognized and canonized. The root cause of social evil in our society is nothing but consumer consciousness. In bid to have more i n order to spend extravagantly people often indulge in all kinds of ills like: kidnapping, bribery, drug addict, money laundry, stealing, armed robbery, gangsterism, corruption and embezzlement.Squandermania consciousness has turned some of our leaders into caterpillars’ of common wealth. In fact the evil malice in us has been exalted to the point of genius in some of us. Moreover, in January 1987, the Anambra State government under the governorship of Captain Emeka Omeruah organized a crusade against squandermania. They so accurately deciphered the basis of indiscipline and underdevelopment in our nation as squandermania mentality. In this work we shall be looking at squandermania mentality as the root cause of our social evil and the possible remedy.In order to better appreciate this topic, let us explicate the basic concept. CONCEPTUALIZATION OF TERMS. Squandermania mentality literally means conscious wasteful or useless spending on daily basis. According to Okolo (1994:9) it is that disposition in a people by which they conceive and judge things by their consumable value. On the whole the society becomes one dominated largely by acquisitive rather than productive instincts. ’ Thus, for him it is materialistic consumable outlook on things. Then, Prof. P.N. Ejiofor (1986:3) viewed the term conspicuous consumption as ‘living above one’s resources and for the overall standard of living of the society for one’s inordinate self aggrandizement. ’ For him, it is spending unnecessarily. Here, squandermania mentality may be used interchangeably with consumer consciousness or conspicuous consumption. Based on this based backdrop, let us know to what extent squandermania mentality is the root cause of our social evil. SQUANDERMANIA MENTALITY IN NIGERIA: THE STORY SO FAR.Today, in our towns and villages, people both rich and poor, indulge in consumer consciousness such as charging astronomically high bride prices, engaging in co stly wedding ceremonies, pompous burial ceremonies, expensive chieftaincy title-taking, excessive feasting, excessive eating and drinking, and useless spending in luxurious cars and colossal village mansions. Prof. Ejiofor (1984:90) attempted to paint a picture of an aspect of conspicuous consumption as it pertains to our burial ceremonies. â€Å"First the corpse may be embalmed, and left in the mortuary for a period ranging from three days to two or three months.During this time, a new building is set up, if the dead did not build one in his life time, but if he did, the house and the walls are renovated. † In the same vein, pomp and pageantry go with weddings, birthday celebrations, title taking, chieftaincy installations, graduations, ordinations, and house warming ceremonies, etc. In fact, Nigerians are drunk with life of ostentation. We place undue emphasis in material social values as a way of life of a people. Thus material success and possession are highly valued in t he social and cultural lives of our people.Peace Pilgrim (1981:12) articulates it in the following terms, â€Å"in this materialistic age we have such a false criterion by which to measure success. We measure it in terms of material things. But happiness and inner peace do not lie in that direction. † Nigeria is the paradigm example of classical consumer society. Okolo(1994:10) viewed squandermania as the foundation of all our problems. â€Å"It is the problem behind our problems. To ignore it in our attack of societal ills would be to pursue a phantom, attacking the disease with a proper diagnosis of its cause. † We can talk of Nigeria problem without mentioning squandermania mentality.That Nigeria is a consumer society is never an exaggeration, for it is manifested in all their activities. Our society is characterized by unproductive spending, wealth exhibitionism and social importance. Hence, prestige and power are mainly construed in terms of material wealth and po ssessions. As a consumer nation, it exhibit one sided apprehension of labour. That is in terms of immediate gain, instant wealth and material success. Sweat, hard work and personal sacrifice have been sacrificed at the altar of laziness, cheap labour, instant gain and consumerism.Okolo(1994:11) posited that â€Å"people of consumer society generally manifest low enthusiasm or appreciation for high values such as patriotism, love of truth, honesty†¦ To labour or sacrifice for these spiritual goods or think of them important is hardly worthwhile for them. † In the educational sector, a lot of people read in order to obtain mere certificate, what is referred to as ‘certificate education. ’ They construe education in terms of its material relevance. Knowledge in the strict sense, for broadening ones horizon, understanding and conquering ones environment is not for them.They seek for certificate education in order to gain affluence and wealth through influence an d high positions in the society. They struggle in order to manifest supremacy in wealth and what it can buy. Success and social progress are defined by them in terms of material prosperity and acquisition. Russell (1975:38) in his own part described the situation thus, â€Å"but what typical modern man desires to get with it is more money, with a view to ostentation, splendour and the outshining of those who have hitherto been his equals. It is clear that the quest for instant wealth and material acquisition is the root cause of the societal ills. All that matters for Nigerian is naira accumulation, the means not withstanding. Consequently, it is no longer news that there is so much robbery, kidnapping, prostitution, human trafficking, embezzlement and all sorts of fraudulent practices in the nation. The hardship in the country notwithstanding, the syndrome for quick money and over night success is a pointer to squandermania mentality. The search for immediate wealth makes the Nige rian to hold tenaciously to power and authority.Conspicuous consumption will lead us to nothing but a consumer nation. Whereby, we spend more than we produce, consequently leading to many inefficiency or disequilibrium in the economy. CONS OF CONSUMER CONSCIOUSNESS The cumulative effect of it will lead to enlargement of his tastes, a change in his life style, in his social values and outlook in life. The person will define his social importance in terms of wealth acquisition and display, then, the type of home he lives in, property acquired and social entertainment held.So, the attitude of wasteful or unproductive spending and wealth exhibitionism will be high in the individual. Conspicuous consumption is one of the root causes of bribery and corruption, armed robbery, prostitution, smuggling, and drug trafficking. Faced by the huge financial demands which they can not meet by honest living, they land themselves in the aforementioned ills. Consumer consciousness channels all our res ources from working to leisure and from investment to unnecessary consumption. Many a time offices and markets are closed to give the dead a so-called befitting burial.The time we spent in long wake keeping ceremonies, marriage ceremonies, housing warning ceremonies, etc, is spent by the Whiteman in his library or laboratory researching on how to develop the machinery he will export later. The money we spend on those occasions is spent by him in taking a balanced diet and investing in meaningful businesses. It has destroyed the value system of our society. The people’s outlook on things is mainly from viewpoint of the consumable value and the material worth. In the developed countries, the most noble and masters are the researchers, the inventors, the statesmen, great philanthropists.In our society the statusquo are mostly the number of cars, the type buildings, the rowdiness of parties, etc. It is not surprise today that many young people indulge in different foul game in or der to make money quick. Squandermania mentality makes us to be more dependent on the industrialized nations. It discourages patronage of our native goods. It is not shocking that most of the drugs, food stuffs, scientific equipments and all sorts of manufactured and consumer good are not produced locally. This has stultifying effects on the creative and imaginative powers of the individual. By being dependent on other nations we enslave ourselves.It makes Nigerian to be imitators instead of competitors with other nations. Since we end up in imitating and reproducing, we lack originality, self transcendence, creativity and self reliance. More so, it vitiates the development of education, science and technology. Today, young people construe education in terms of material gain. Whereby, they end up in ‘certificate education. ’ People are not concerned with the qualitative functional education, which will help them conquer and transform their environment. Instead are inter ested in certificate education which guarantees them position of influence in the society.In fact, conspicuous consumption has adverse effect on moral, economic, developmental and political facets of the society. It reinforces wrong values, leads to exportation of wealth, encourages social vices, hampers productivity, and slows down the rate of economic development. We devote too much time in consuming than in producing. Since we have seen that the gestalt of our problem is squandermania in outlook, then, what shall we do! PANACEA What Nigerian need is a new awareness of self, a novel sense of dignity and altogether new life and value system. This new ideology should make value to be more qualitatively rather than to have more.That is to live more qualitative life instead of quantitative life. Education is vital instrument through which these values can be inculcated. Nigeria needs to imbibe the value of self-discipline. He must be ready to restrain his ungodly desires, goals and am bitious which he generally views in materialist terms. In quest to have more, display more, enjoy more, the Nigerian has lost sense of self discipline in quest for naira and what it can purchase. Thus, it through self discipline, the nation can manage her resources judiciously. Our society should cultivate the spirit of working for the universal good.For no society of human beings is possible without what binds them together, what they strive after together. Thus, common good is the good of the members of the society. If, we think of those things which make up the society as a whole, squandermanianism will be a forgotten issue. Management of our resources, time and talents well is a necessary condition. Foolish people waste their money, whilst wise people invest their money and are called investors. In order to shun squandermania mentality the Nigerian must cultivate pragmatic spirit. This imbues him with the mind to discover or invent and to be creative.This is attitude of sacrific e, self-dedication and labour. For consumer mentality radically weakens the will and people to put pleasure before business, sweet before sweat. More so, let us spend less time and money in celebrations, so as to have more money for the investment and time for working. It is by patronizing our locally made goods, can we encourage our local industries. CONCLUSION It is high time we admit that there is more to life than money, therefore, should focus not just on money wasting, but on general well-being.Studies have shown that those who are high in materialistic orientations are lower in levels of life satisfaction. Squandermania is a public enemy that should be stamped out of our society. It fails to satisfy men whose nature clamours for higher, more lasting values. We should aim at minimizing the traditional pursuit of wealth, conspicuous consumption and the acquisition of possessions and the attainment of status. Let us aspire to be more rather than to possess more. May all hands be on deck in order to bring to an end the inflicted wound of wasteful living.

Assess How The Language Of Teenagers Has Changed Over Time Essay

The language of teenagers has changed radically over time, the use of slang and clichà ¯Ã‚ ¿Ã‚ ½s are now commonly used in everyday English Language, in particular amongst teenagers. For this essay I visited a local high school to gain evidence of how teenagers express themselves and converse with peers and adults, including adults in authority. I also observed an anger management session and listened to the language used in this setting and also at break times. The findings of these observations are on a tape recording enclosed. The language of teenagers is greatly affected by television and pop music and this contributes to the change in modern day English and the phrases and slang that teenagers use, for example in the high school I visited the teenage boys used a lot of phrases and words that are used in rap music, a boy referred to his friends as ‘homies’ rather that ‘mates’ of ‘pals’ the word ‘homies’ is used a lot within American rap music. This shows how teenagers are influenced and how these kinds of words become popular amongst teenagers. Swearing is also part of modern day language and is very common and has increased hugely over the years, swearing is now socially accepted amongst teenagers and their peers, swearing has always been frowned upon in the English Language but has increased drastically through the past ten years. The change in language is obvious amongst teenagers and adults, most of the teenagers in the school I visited said that they would never swear at parents and teachers and it is disrespectful, although they would not be as concerned about swearing at someone the same age as them as it is not offensive anymore to their generation. This is because when the teenager’s parents and teachers were growing up, swearing was seen as very offensive and a sign of disrespect. Case studies I asked a 15-year-old girl to find the five euphemisms that she would use for the following: (a) to die, (b) to urinate (c) to be a drunk (d) to say hello to a friend. I also asked a 15-year-old boy to do the same exercise, these are my findings: Chloe – To die: to pass away, to kick the bucket, to be no longer with us, to have slipped away, to have ‘kiffed’ it. To urinate: to go for a wee, to do a number one, to have a piss, to wet the daisies, to relieve myself. To be drunk: pissed, bladdered, wasted, trollyed, out of it. To say Hello to a friend: alright, hi, hiya. Lee – To die: to kiff it, kick the bucket, passed away, to have gone to the pearly gates, passed onto the other side. To urinate: to have a piss, to have a slash, to drain the main vain, to go the bog, to shake the snake. To be drunk: wasted, bladdered, pissed, out of if, wankered. To say hello to a friend: alright mate, alright, how do, hi, or a head nod with no speech. The findings show that gender influences teenagers speech slightly the girls language is slightly more polite than the boys and the boy used a lot of slang when referring to the above words and phrases, the most obvious ones were the words used when the male teenager refers to passing urine as ‘shake the snake, and drain the main vain’ these sayings caused much amusement to Lees male and female peers. The teenagers are showing how they contribute to new meanings for words and linguistic change. Euphemisms are one of the most fertile sources of new meanings, things that were thought to be to nasty to talk about directly were given polite but roundabout expressions. An example of this is when indoor plumbing was first installed into houses in the eighteenth century the room were first called water closet, this was soon abbreviated to W.C and then replaced by toilet, which had previously meant ‘dressing table’. These words are still seen as crude by many people and other euphemisms have came into force such as toilet, bathroom. The teenagers regularly referred to the toilet as the ‘loo’ and ‘bog’. Sex is another area where euphemisms flourish amongst teenagers, in the nineteenth century Jane Austin wrote in her novel ‘they had no intercourse but what the commonest civility required’ , Jane Austin would of not of expected the effect that this sentence would have on the modern day reader, in her time the word ‘intercourse’ meant ‘dealings between people’. In the twentieth century the phrase ‘sexual intercourse arrived this was used as a delicate way to refer to ‘sex’. This has now been shortened to intercourse, and this sexual sense is now so common that the teenagers in the school I visited found it impossible to use the word ‘intercourse’ in any other sense. They also have their own words for sexual intercourse these words are not seen as offensive and are common in teenagers language. This shows how teenagers influence the change in word meanings and euphemisms in society. The teenagers in the school I visited also use a lot of clichà ¯Ã‚ ¿Ã‚ ½s which, again is another sign of language change in today’s society, adults are also guilty of using clichà ¯Ã‚ ¿Ã‚ ½s in modern day English, which is were the Influence could of came from for the teenagers to use clichà ¯Ã‚ ¿Ã‚ ½s in their everday language, some of the most popular clichà ¯Ã‚ ¿Ã‚ ½s I heard amongst the teenagers were ‘ at the end of the day’, ‘I hear what your saying’ and ‘basically’. The most common one was ‘you know what I mean’ Another chacteristic of teenage language is rising intonation at the end of a sentence. This has long been noticed as a characteristic feature of Australian English, and is also favoured by some speakers of American English and is very popular within the language of teenagers, this was something that I noticed whilst speaking to the majority of the class. To me as a listener, a sentence ending on a rise sounds like a question – as if the speaker is saying ‘She comes from Sydney?’, rather than making a declarative statement. But in the last ten years or so, the popularity of Australian soap operas among British teenagers has led to the widespread adoption of this feature among younger people in the UK. It is too early to say whether this is short-term or whether rising intonation will become standard practice for a significant number of British speakers and the teenagers will make it more popular the more they use it. The increasing popularity of the rising intonation can be traced back to a specific event: the arrival in the UK of Australian programmes like Neighbours and Home and Away. Teenagers are big fans of these type of soap operas mean exposure to repeated instances of this feature has had measurable effects on the linguistic behaviour of quite large numbers of British speakers of all ages. Music such as rapping also influences teenagers and many adopt this way of speech some of these words appear below with the translations taken from a book of slang words: Bluh – slurred pronunciation of â€Å"Blood†, meaning homie or friend. Bredren – meaning mate, or one’s audience. It derives from the Jamaican ragga scene, not the German. Buggin – Acting weird or upset. Same as acting bug. Herb – spliff, bud, dodo, doja, ganja, weed, etc. Wack – Awful, cheap, stupid, weak, etc. Rarely spelled whack. Only preceded by â€Å"wiggedy† by the tragically ancient. Murk – Murder. Also leave, as in â€Å"I’m finna murk. Peace.† Punk – Coward or arsehole (not in the anatomical sense). Bling – excessively showy or expensive jewellery, cars, etc. From the supposed â€Å"sound† made by light bouncing off diamonds. Its first known usage was in The Silvertones’ â€Å"Bling Bling Christmas†. (Fo) shizzle, my nizzle – â€Å"(For) sure, my nigger†, or alternatively, â€Å"yes, dear†. -izzle is a standard suffix. So shizzle could also mean â€Å"shit† (meaning good), shoes, shirt or shed. (Slang a bluffers guide.1999.pg22) Wigga – a white nigger, a wannabe. This way of speaking seems very common nowadays, but I suspect if we were to listen to teenagers from London we would hear a lot more of these words as London’s rap scene is a lot more popular than that of the North West. David Crystal says â€Å"It’s very recent, this new rhythm that comes from rapping,† Until recently, people have spoken in the rhythms of Shakespeare: ‘tum te tum te tum’. But this new hip-hop accent is ‘rat tat tat tat tat’. It’s more common than Received Pronunciation these days. Hardly anyone speaks traditional RP any more – maybe one or two per cent.† (The language revolution pg22) As the language of teenagers changes there will be many linguistic changes and different features introduced over time, as teenagers are very impressionable it is easy to see why these changes spread so quickly. Bibligraphy The language revolution. 2002. David Crystal(Cambridge: Polity Press), Flappers to rappers- American youth slang-.Tom Dalzell (Merriam-Webster / Springfield, Massachusetts. 1996.) Socialinguistics : Nikolas Coupland and Adam Jaworski. Palgrave (1997)

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World War Ii and Military Organized Women Essay Example for Free

World War Ii and Military Organized Women Essay 1. The reason for mentioning WWI soldiers is during The Depression soldiers from WWI wanted a bonus that was promised them but wanted it early since they along with millions of others were facing desperate times. Not only did the government refuse to pay them but also the protest marches by the former soldiers were broken up and the camps they slept in burned. The song in general refers to how people were well employed building the country up before the economic collapse ended up literally begging for money or food just to survive. 2. Relief: Immediate action taken to halt the economies weakening. FDR authorized almost $5 million to implement work-relief programs. Hoping to lift the country out of the crippling Great Depression, Congress allowed the president to use the funds at his discretion. The act was unparalleled and remains the largest system of public-assistance relief programs in the nation’s history. Recovery: Temporary programs to restart the flow of consumer demand. FDR created programs focused on stabilizing the economy by creating long-term employment opportunities, decreasing agricultural supply to drive prices up, and helping homeowners pay mortgages and stay in their homes, which also kept the banks solvent. Reform: Permanent programs to avoid another depression and insure citizens against economic disasters. Reforms targeted the causes of the depression and sought to prevent a crisis like it from happening again. In other words,  financially rebuilding the U.S. while ensuring not to repeat history. 3. For African Americans during the war, businesses were beginning to boom at the time. Because very small percentage of African Americans fought in the war, it made jobs available. After WWII African American business owners and families had enough money to move out of crowded inner cities and into the suburbs. Of coarse, the migration of African American families to suburban areas led to white families relocating, which led to vacant homes resulting in lower property value in neighborhoods. This had social-economic impact on African American communities as the racial attitudes of the time still persist. Women: it gave them the ability to join the work force. Prior to WWII, women stayed home and took care of domestic affairs, or worked as nurses, secretaries, or teachers. Women during the war had to replace male workers who fought. When the men returned home women commonly went back to their traditional roles, while some remained at their jobs. Although, it still wasnt acceptable for women to work jobs typically done by men, the war allowed women to prove that they can. Japanese Americans were ostracized and put into concentration camps during WWII. After the war many people distrusted the Japanese and other Asian ethnicity in America for a while, which made it hard for them to advance. The treatment of Japanese Americans during and after the war isn’t our proudest moment and is seldom mentioned in our countries history. 4. Foreign Policy: Harding spurned the League of Nations and negotiated peace treaties with Germany and Austria. His greatest foreign policy achievement came in the Washington Naval Conference of 1921–22, in which the worlds major naval powers agreed on a naval limitations program that held sway for a decade. Xenophobia: Harding believed that the less we were involved in foreign  affairs the better. While he did deviate from this on several occasions his foreign policies were always directed towards reducing the chances of being involved in another conflict. Business in America: Harding followed a predominantly pro-business, conservative Republican agenda. Taxes were reduced, particularly for corporations and wealthy individuals; high protective tariffs were enacted; and immigration was limited. Harding signed the Budget and Accounting Act of 1921, which streamlined the federal budget system and established the General Accounting Office to audit government expenditures. Section 2: The war had a dramatic impact on women. The sudden appearance of large numbers of women in uniform was easily the most visible change. The military organized women into auxiliary units with special uniforms, their own officers, and, amazingly, equal pay. By 1945, more than 250,000 women had joined the Womens Army Corps (WAC), the Army Nurses Corps, and Women Accepted for Voluntary Emergency Service (WAVES), the Navy Nurses Corps, the Marines, and the Coast Guard. Most women who joined the armed services either filled traditional womens roles, such as nursing, or replaced men in non-combat jobs. During World War I, the first demonstrations were held to give women the right to vote. Women also substituted for men on the home front. For the first time in history, married working women outnumbered single working women as 6.3 million women entered the work force during the war. The war challenged the conventional image of female behavior, as Rosie the Riveter became the popular symbol of women who abandoned traditional female occupations to work in defense industries. Social critics had a field day attacking women. Social workers blamed working mothers for the rise in juvenile delinquency during the war. On top of everything else there were shortages: food, clothing, transportation, cosmetics and eligible men. There were long hours of hard work, there were sons, husbands and fathers to bury. Women had their share of problems, but they survived and persevered. In closing the world wars changed America in many ways. Both the roles of men and women changed drastically and still to this day most of those changes are still taking affect in society.

Impact of Mergers and Acquisitions on the TATA Group

Impact of Mergers and Acquisitions on the TATA Group IMPACT OF MERGERS AND ACQUISITIONS ON THE FINANCIALS AND PERFORMANCE OF TATA GROUP In the current globalised economy, mergers and acquisitions are being progressively more used the world over, for increasing competitiveness of companies through gaining better market share, expansion of the portfolio to reduce business risk, to capitalize on the economies of scale and for entering new geographies, etc. This research study was intended to analyze the consequence of going global market through merger and acquisition and traders long and short term earnings .Thereby study the impact of mergers on the financials by examining some pre- merger and post-merger financial ratios, with the sample of firms chosen as three major mergers/acquisitions of TATA Group. The results put forward that there are small variations in terms of post merger financial performance of the joint firm is not considerably different from the aggregate performance of the acquirer and target companies before the merger. INRODUCTION Merger and acquisitions have emerged as chief forces in the contemporary financial and economic environment. They have been a source of corporate growth and in India, it has changed radically after the liberalization of Indian economy. Mergers and acquisitions came up as one of the most efficient methods of such corporate restructuring, and became an essential part of the long-term trade strategy of corporates in India. The sole three chief objectives at the back any MA transaction were found to be: Improving Profitability Rapid growth in scale and closer time to market Acquirement of new technology Many in corporate India would be jealous of the Tata Groups strategy around mergers and acquisition. In the past 8 years, the Tata Group had made 35 overseas acquisitions, including coal and iron ore mines, adding up Rs 78,000 crore, mostly in the past 3 years. Research problem To examine the consequence of going global through mergers and acquisitions and the traders long term and short term earnings respectively. This would aid in studying the impact on companies financials past the merger or acquisition. To also determine the enterprise value of the corporation by comparing it with the peer group and studying the value of the firm Objective of the study To analyze the a thorough detailed case study of 3 companies of Tata Group who merged or acquired in the past years. To evaluate the closing price of 3 companies previous to and post acquisition To weigh up the key financial ratios of 3 companies pre and post acquisition To do valuation of two companies through enterprise value and contrast the value with peer group and examine in detail Review of literature The subsequent studies are the few existing work reviewed which were conducted by researchers in the sight of analyzing the financial performance during and post merger activity across different time periods. Effect of mergers on corporate performance in India, writer Mrs. Vardhana Pawaskar (2001), considered the impact of mergers on corporate performance. A case study, assessed the financial performance of a cloth unit by using ratio analysis. It compared the before and after merger performance of the corporations between 1992 and 2000 to identify their financial character. The study found that the financial fitness was never in the strong zone during the whole study period and ratio analysis highlighted that decision-making incompetence accounted for a good number of the problems. Forecasting the viability and operational efficiency by Mr Mulla through use of ratio analysis, suggested matching up efficiency and success of all facets of management and put the company on a lucrative footing. The study of a sample of firms, restructured through mergers, showed that the merging firms were at the inferior end in terms of liquidity of the industry. The merged firms gave better performance than industry in terms of profitability. Mergers and operating performance by Mr. Mantravadi: An Indian perspective, attempted to examine the impact of mergers on the performance post industrial reforms, by investigating some pre- and post-merger financial ratios, with chosen sample firms, and all mergers linking public and private limited companies The study results suggested that there are minor variations in terms of impact on financial performance of subsequent mergers across different intervals of time in India. It also indicated that for mergers between the same groups of companies in India, there has been deterioration in performance and ROI. Mergers acquisitions in the banking sector presents the Indian scenario, author Mr. Selvam (2007) has analyzed the impacts of stock price changes to mergers and acquisitions behavior taken place in banking industry with particular reference to private and public sector banks. Found that share prices are market sensitive. From the financial analysis it was noted that greater part of the banks went for branch extension and this has affected profitability to some extent and it resulted in harmful competition among the players. To add up the review of literature, many offerings have offered diverse perspectives of merger in different industries globally and explained the valuation techniques followed by merging companies, and shareholders possessions effect due to merger. From the review of several papers evaluating the pre and post merger performance of merged companies, it is incidental that majority of the studies powerfully support the concept of improved post merger performance due to merger and it is valuable to the acquirer companies. METHODOLOGY Methodology of the study Sample selection There are several mergers within the TATA Group during the study period from 01.04.2006 to 31.03.2009. For the purpose of corporate analysis, it was decided to select three of the highest deals which merged/ acquired under the TATA Group during the study period. Hence, the sample size of this study is confined to 3. Besides, while selecting the sample, following points were taken into account. Acquirer and target companies ought to belong to the same industry. Availability of information on the merger and industry. Period of the study The present study covers a period of one year from April 1, 2006 to March 31, 2009. But in order to evaluate the financial performance of sample companies on a comparative basis, 15-20 days before merger and after merger were considered. Sources of data The present study fundamentally depends on secondary data. The required data on financial performance prior and post merger were composed and they were obtained from Prowess software, Internet sources, Business Journals (ICFAI JOURNAL ON M A) The data were also collected from books, and newspapers. Tools used In order to study the financial performance of acquirer and target companies, ratios Debt-Equity Ratio, ROCE (%),net profit margin, P/E, EPS, OPM(%) and valuation. (1) Analysis of financial performance The pre-merger average performance of the companies were compared with the post- merger performance of the joint firm. The present study attempts to calculate and study the pre and post merger performance of acquirer and target companies by using financial ratios in order to determine whether mergers resulted in shareholders wealth or not. Accordingly, the following null hypothesis has been tested: H0: The post merger financial performance of the combined firm is not significantly different from the aggregate performance of the acquirer and target companies prior to the merger. (2) Ratios Debt-Equity Ratio: A gauge of a companys financial leverage obtained by dividing  the total liabilities  by  stockholders equity. It shows what proportion of equity and debt the company is presently using to finance their assets. Return On Capital Employed (ROCE) : ROCE compares earnings with the invested capital in the company. It is like Return on Assets (ROA), but also considers sources of financing Net profit margin: The profit margin says how much profit a company makes for every 1 Rupee it generates in revenue or sales. Profit margins vary with industry to industry, but all else being equal, the greater a companys profit margin compared to its competitors, the better. P/E: It is a gauge of the price paid for a share relative to the annual net income or the net profit earned by the firm per share. EPS: The portion of a companys profit which is allocated to each outstanding share of common stock.  Earnings per share  acts as an indicator of  a companys profitability. OPM: Operating margin is a measurement of the proportion of a companys revenue that is left over after variable costs of production such as wages, and raw materials have been paid. A healthy operating margin is required for a company to be able to pay for its fixed costs, such as interest on debt. Also known as operating profit margin and net profit margin. (3) Enterprise Value Enterprise value is a figure that, in theory, represents the entire cost of a company if someone were to acquire it. Enterprise value is a more accurate estimate of takeover cost than market capitalization because it takes includes a number of important factors such as preferred stock, debt, and cash reserves that are excluded from the latter metric. ANALYSIS OF DATA TATA GROUP OF COMPANIES One of the Indias largest business groups in the country. It has about 96 operating companies. Diverse business in 7 sectors. Revenues equivalent to 5.3% of Indias GDP. Group revenue FY 2008: Rs 251,543 Cr. / $ 62.5 b. Group profit FY 2008: Rs 21,578 Cr. / $ 5.4 b .Its 27 publicly listed companies have a combined market capitalization which is the 2nd highest among all business houses in India. Largest employer in private sector over 300,000 employees. A shareholder base of over 2.9 million. Operations in over 80 countries. Products and services exported to 85 countries Tata is a rapidly growing business group based in India with significant international operations. Revenues in 2007-08 are estimated at $62.5 billion (around Rs251, 543 crore), of which 61 per cent is from business outside India. The group employs around 350,000 people worldwide. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics. The business operations of the Tata group currently encompass seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. The groups major companies are beginning to be counted globally. Considering two of the largest mergers of TATA Group -Tata Steel became the sixth largest steel maker in the world after it acquired Corus. -Tata Communications is a leading global provider of a new world of communications. With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers. TATA STEEL-CORUS About the acquisition Date: 30th March 2007 Acquirer: Tata Steel Limited Target company: Corus Plc. Stake: 100 % Deal amount: US$ 12201 m Sector: Steel sector MERGER On January 31, 2007, India based Tata Steel Limited (Tata Steel) acquired the Anglo Dutch steel company, Corus Group Plc (Corus) for US$ 12.20 billion. The merged entity, Tata-Corus, employed 84,000 people across 45 countries in the world. It had the capacity to produce 27 million tons of steel per annum, making it the fifth largest steel producer in the world as of early 2007. Before the acquisition, the major market for Tata Steel was India. The Indian market accounted for sixty nine percent of the companys total sales. Almost half of Corus production of steel was sold in Europe (excluding UK). The UK consumed twenty nine percent of its production. After the acquisition, the European market (including UK) would consume 59 percent of the merged entitys total production. DEAL : An auction was initiated on January 31, 2007, and after nine rounds of bidding, TATA Steel could finally clinch the deal with its final bid 608 pence per share, almost 34% higher than the first bid of 455 pence per share of Corus. Synergies There were many likely synergies between Tata Steel, the lowest-cost producer of steel in the world, and Corus, a large player with a significant presence in value-added steel segment and a strong distribution network in Europe. Among the benefits to Tata Steel was the fact that it would be able to supply semi-finished steel to Corus for finishing at its plants, which were located closer to the high-value markets The Pitfalls Though the potential benefits of the Corus deal were widely appreciated, some analysts had doubts about the outcome and effects on Tata Steels performance. They pointed out that Corus EBITDA (earnings before interest, tax, depreciation and amortization) at 8 percent was much lower than that of Tata Steel which was at 30 percent in the financial year 2006-07 COMPANYS RETURN BEFORE AND AFTER ACQUISITION PRE-ACQUISITION POST-ACQUISITION FINDINGS As we can see from the line chart that the %cumulative abnormal return before acquisition was sharply decreasing since past month with not even a single glimpse of positive return on any single day. But as soon as the acquisition took place, the earnings showed a marginal rise and again got back to the level where it was just before the acquisition. This happened due to very large debt generated due to overpaying by acquiring the Corus at a very high price of 608 pence per share as compared to previously valued 455 pence per share. INTERPRETATION Debt equity ratio on post acquisition increase because Corus debt was high it was GBP1.6b to buy Corus and so its debt is almost 116% more than in pre acquisition. ROCE shows that post acquisition is very less as compared to pre acquisition it has negative percentage because company has short term returns after one year it will improve in the long run. Net profit margin has very less change as profit is not much affected. P/E increases in post acquisition by 30.2% which show high future cash flow. ROE is decreasing by 37.7 which show that it has more debt than equity. EPS has a very minor change. Operating profit margin is reduced by 9.1% which shows that it has low profit. TATA COMMUNICATION-NTT DOCOMO About the acquisition Date: 13th November 2008 Acquirer: Ntt-Docomo Target company: Tata Teleservices Ltd. Stake: 26 % Deal amount: US$ 2700 m Sector: Tele-communication MERGER Tata Teleservices has sold a stake of 26% to Japans NTT DoCoMo. The deal value is $2.7 bn. Tata Tele has 30 million CDMA subscribers and is rolling out its GSM services. Some say the deal is over-valued and some say its not easy to put value on the fastest growing mobile market in the world. India is the fastest growing market second only to China. It adds 10mn subscribers every month. The current subscriber base stands at 300+million and is expected to be 700 million in 2012. That is almost double to todays numbers. The Road ahead Great deal it may be, but it has its risks. One reason is that telecom deals have been controversial in recent times. This goes back to late last year when the government sold pan-India licenses for $333 million apiece, amid a welter of controversy. DoCoMo, in accordance with regulations of the Securities and Exchange Board of India, expects to make an open offer to acquire up to 20 per cent of outstanding equity shares of Tata Teleservices Maharashtra (TTML), a Tata telecommunication company, through a joint tender offer along with Tata Sons. TTSL and TTML through the Tata Indicom brand, have increased their combined share of the fast-growing Indian mobile market and their combined subscriber base now stands at over 30 million. TTSL expects to leverage DoCoMos expertise in the development and delivery of value-added services, where DoCoMo is a firmly established market leader. FINDINGS Debt equity ratio on post acquisition debt is increasing which shows company debt is increasing after merger. ROCE is constant it has not change much.Net profit margin increases by 11.10 as it income increases in post acquisition as compared to pre acquisition. P/E highly increases in post acquisition from 0 to 12%. ROE is decreasing by 1.53% which shows that it slightly more debt than equity. EPS is increasing drastically by 24.27% which is very profitable for investors. Operating profit margin is increased by 15.43% which shows that company profit margin is very fairly profitable. COMPANYS RETURN BEFORE AND AFTER ACQUISITION PRE-ACQUISITION POST-ACQUISITION INTERPRETATION The return of the target company Tata Communication has been very poor since the past 15 to 20 days before the acquisition but it almost got to break-even soon after the acquisition date. This sustained for the next 8 to 10 days but again got back into negative returns zone due to poor customer support to the newly entered Docomo brand in highly competitive communications market in India. TATA MOTOR JLR About the acquisition Date: 27th March 2008 Acquirer: Tata Motors Ltd Target company: Jaguar Land Rover Stake: 100 % Deal amount: US$ 2300m Sector: Automotive Detailed Case Study In June 2008, India-based Tata Motors Ltd. announced that it had completed the acquisition of the two iconic British brands Jaguar and Land Rover (JLR) from the US-based Ford Motors for US$ 2.3 billion. Tata Motors stood to gain on several fronts from the deal. One, the acquisition would help the company acquire a global footprint and enter the high-end premier segment of the global automobile market. After the acquisition, Tata Motors would own the worlds cheapest car the US$ 2,500 Nano, and luxury marquees like the Jaguar and Land Rover. Though there was initial skepticism over an Indian company owning the luxury brands, ownership was not considered a major issue at all. According to industry analysts, some of the issues that could trouble Tata Motors were economic slowdown in European and American markets, funding risks, currency risks etc. The Challenges Morgan Stanley reported that JLRs acquisition appeared negative for Tata Motors, as it had increased the earnings volatility, given the difficult economic conditions in the key markets of JLR including the US and Europe. Moreover, Tata Motors had to incur a huge capital expenditure as it planned to invest another US$ 1 billion in JLR. This was in addition to the US$ 2.3 billion it had spent on the acquisition. Tata Motors had also incurred huge capital expenditure on the development and launch of the small car Nano and on a joint venture with Fiat to manufacture some of the companys vehicles in India and Thailand. This, coupled with the downturn in the global automobile industry, was expected to impact the profitability of the company in the near future CURRENT SCENARIO In less than three years after its acquisition, Jaguar Land Rover has metamorphosed from a millstone around Tata Motors neck into its crowning jewel. In the June 2010 quarter, JLR division accounted for nearly 70% of the companys net profit and over 60% of its revenues on the consolidated basis. This was more than what the market has expected and the stock is up by nearly 150% in the past two trading sessions. JLR benefited from an improvement in its pricing power and a favourable exchange rate in the US dollar and the euro. The two worked in tandem and resulted in a sharp 60% jump in JLR revenue per unit to around  £38,000 in June 2010 quarter compared to the  £23,800 a year ago. With the raw material costs remaining benign, it led to a sharp improvement in the divisions operating margin and its reported net profit of  £221 million (`1,613.3 crore) in the first quarter as against a net loss of  £64 million (`467 crore) a year ago. FINDINGS Debt equity ratio is increasing by 42.27% as Tata took loan of banks to acquire JLR.ROCE increases vey high by 343.60% as compared to pre acquisition as it gauges that company that generate its earnings from the total pool of capital which indicates profitability.Net profit margin increases as it income increases in post acquisition as compared to pre acquisition. P/E highly decreases in post acquisition by 60.1% which in investor point of view they will be profitable to invest to get high earning. ROE is highly increasing by 480.15% which shows that it has more equity than debt. EPS is increasing drastically by 480.15% which is very profitable for investors. Operating profit margin is reduced by 41.44% which shows that company profit margin is very less. COMPANYS RETURN BEFORE AND AFTER ACQUISITION PRE-ACQUISITION POST-ACQUISITION INTERPRETATION As we can see from the line chart that the cumulative return before merger was negative and the entire trend is moving in the negative direction due to poor returns of tata motors. A soon as the acquisition took place, the highly profit generating Jaguar as well as Land Rover added to the profit and earnings of the tata motors. The brand value of JLR added to the highly reputable Tata Group and the companys balance sheet. This can be clearly seen in the line chart above. VALUATION AND INTERPRETATION EV Multiples of Tata Corus Tata Steel and Corus Group deal happened at high multiples compared to its peers. We can observe that the average multiples of the peer group company stands half compared to the deal multiples. Sales Multiple: The average sales multiple of its peers is 1.17x compared to the deal of 0.68x of Corus Groups sales. This can be possible due to high sales value, reducing the multiple to 0.68x. The lowest multiple (Steel Authority of India) is at 0.73x. EBITDA Multiple: EBITDA multiple of its peers averages at 4.38x compared to the deal multiple of 7.02x of Corus Groups sales. Even the highest multiple (Jindal Steel Power) is at 4.38x. This is almost half of the deal multiple. It can be observed that Tata played very aggressively. EBIT Multiple: EBIT multiple of its peers averaged at 5.54x compared to the deal of 10.19x of Corus Groups sales. Even the highest multiple (Jindal Steel Power) is at 8.39x. PE Multiple: The PE multiple of the deal is very high on the account that the margins of Corus are very low compared to Tata Steel and other peers. The average PE multiples is 7.95x compared to 68.23x at which the deal haapened. EV Multiples of Tata NTT Docomo The deal of Tata Teleservices and NTT Docomo happened at very high multiples. We can observe that the average multiples of the peer group company stands very low compared to the deal multiples. Sales Multiple: The average sales multiple of its peers is 5.37x compared to the deal of 26.98x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 9.24x. Thus we can conclude that Tata Teleservices got very good price for its stake dilution for NTT Docmo. EBITDA Multiple: Again the average EBITDA multiple of its peers is very less, 16.35x compared to the deal of 99.81x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 26.74x. This is a huge difference. NTT Docomo paid 6 times more what it should have paid to Tata. EBIT Multiple: EBIT multiple of its peers is 25.5x compared to the deal of 952.96x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 41.02x. PE Multiple: The PE multiple for Tata Teleservices is negative as its net income is negative Note: The multiples are high on account that Sales and the profitability of Tata Teleservices is low, inturn giving very high multiples. Its sales stands at Rs. 1,815.5 Cr. compared to the average sales of Rs. 11,490.6 Cr. of its peers. FINDINGS FROM VALUATION OF ENTERPRISE VALUE MULTIPLE Tata Corus Tata Steel and Corus Group deal happened at high multiples compared to its peers. We can observe that the average multiples of the peer group company stands half compared to the deal multiples. Even the highest multiple (Jindal Steel Power) is at 4.38x. This is almost half of the deal multiple It can be observed that Tata played very aggressively as it paid high enterprise value as compared to our analysis. A reason for Corus to be sold is chance to Bail out of Debt and Financial stress. TATA Steel Paid 7.02 Times EBITDA of Corus Enterprise Value. The PE multiple of the deal is very high on the account that the margins of Corus are very low compared to Tata Steel and other peers the only company who has high P/E is Jindal steel. Tata NTT Docomo The deal of Tata Teleservices and NTT Docomo happened at very high multiples. We can observe that the average multiples of the peer group company stands very low compared to the deal multiples. The average sales multiple of its peers is 5.37x compared to the deal of 26.98x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 9.24x. Thus we can conclude that Tata Teleservices got very good price for its stake dilution for NTT Docomo. The PE multiple for Tata Teleservices is negative as its net income is negative. EBITDA multiple of its peers is very less, 16.35x compared to the deal of 99.81x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 26.74x. This is a huge difference. NTT Docomo paid 6 times more what it should have paid to Tata. The multiples are high on account that Sales and the profitability of Tata Teleservices is low, in turn giving very high multiples. Its sales stands at Rs. 1,815.5 Cr. compared to the average sales of Rs. 11,490.6 Cr. of its peers. SUMMARY Except Tata Steel- Corus deal, all the other 2 acquisitions was well accepted by not only well accepted by the owners of the company (the shareholders) but even made the entire Tata group come into the eyes of fortune 500 list. In-fact it ranked at 56th position at a global level in 2009 CONCLUSION This study was undertaken to test what is the impact of mergers on the financials of acquiring corporate by examining some pre- merger and post-merger financial, in terms of impact on operating performance. The results from the analysis of pre- and post-merger operating performance ratios for the acquiring firms in the sample showed that there was a differential impact of mergers, for different industry sectors in India. Type of industry does seem to make a difference to the post-merger operating performance of acquiring firms. Expansion through mergers and acquisition is one of the best ways for any domestic company to step outside the shores of India in an international market place and acquit itself as a global player Company can turn into conglomerate in reasonably less time by capitalizing on its strengths of efficiency and effectiveness by acquiring relatively poor performing companies as TATA did in almost all its group of companies Recent examples of companies which adopted similar pattern of expansion are Renuka Sugars, Arcelor Mittal, Reliance, Essar Group, Aditya Birla Group, etc. One can study any of the above mentioned company and conclude that the key underlying decision of these companies expanding quickly and efficiently is their timely decision of merging and acquiring appropriate companies Impact of Mergers and Acquisitions on the TATA Group Impact of Mergers and Acquisitions on the TATA Group IMPACT OF MERGERS AND ACQUISITIONS ON THE FINANCIALS AND PERFORMANCE OF TATA GROUP In the current globalised economy, mergers and acquisitions are being progressively more used the world over, for increasing competitiveness of companies through gaining better market share, expansion of the portfolio to reduce business risk, to capitalize on the economies of scale and for entering new geographies, etc. This research study was intended to analyze the consequence of going global market through merger and acquisition and traders long and short term earnings .Thereby study the impact of mergers on the financials by examining some pre- merger and post-merger financial ratios, with the sample of firms chosen as three major mergers/acquisitions of TATA Group. The results put forward that there are small variations in terms of post merger financial performance of the joint firm is not considerably different from the aggregate performance of the acquirer and target companies before the merger. INRODUCTION Merger and acquisitions have emerged as chief forces in the contemporary financial and economic environment. They have been a source of corporate growth and in India, it has changed radically after the liberalization of Indian economy. Mergers and acquisitions came up as one of the most efficient methods of such corporate restructuring, and became an essential part of the long-term trade strategy of corporates in India. The sole three chief objectives at the back any MA transaction were found to be: Improving Profitability Rapid growth in scale and closer time to market Acquirement of new technology Many in corporate India would be jealous of the Tata Groups strategy around mergers and acquisition. In the past 8 years, the Tata Group had made 35 overseas acquisitions, including coal and iron ore mines, adding up Rs 78,000 crore, mostly in the past 3 years. Research problem To examine the consequence of going global through mergers and acquisitions and the traders long term and short term earnings respectively. This would aid in studying the impact on companies financials past the merger or acquisition. To also determine the enterprise value of the corporation by comparing it with the peer group and studying the value of the firm Objective of the study To analyze the a thorough detailed case study of 3 companies of Tata Group who merged or acquired in the past years. To evaluate the closing price of 3 companies previous to and post acquisition To weigh up the key financial ratios of 3 companies pre and post acquisition To do valuation of two companies through enterprise value and contrast the value with peer group and examine in detail Review of literature The subsequent studies are the few existing work reviewed which were conducted by researchers in the sight of analyzing the financial performance during and post merger activity across different time periods. Effect of mergers on corporate performance in India, writer Mrs. Vardhana Pawaskar (2001), considered the impact of mergers on corporate performance. A case study, assessed the financial performance of a cloth unit by using ratio analysis. It compared the before and after merger performance of the corporations between 1992 and 2000 to identify their financial character. The study found that the financial fitness was never in the strong zone during the whole study period and ratio analysis highlighted that decision-making incompetence accounted for a good number of the problems. Forecasting the viability and operational efficiency by Mr Mulla through use of ratio analysis, suggested matching up efficiency and success of all facets of management and put the company on a lucrative footing. The study of a sample of firms, restructured through mergers, showed that the merging firms were at the inferior end in terms of liquidity of the industry. The merged firms gave better performance than industry in terms of profitability. Mergers and operating performance by Mr. Mantravadi: An Indian perspective, attempted to examine the impact of mergers on the performance post industrial reforms, by investigating some pre- and post-merger financial ratios, with chosen sample firms, and all mergers linking public and private limited companies The study results suggested that there are minor variations in terms of impact on financial performance of subsequent mergers across different intervals of time in India. It also indicated that for mergers between the same groups of companies in India, there has been deterioration in performance and ROI. Mergers acquisitions in the banking sector presents the Indian scenario, author Mr. Selvam (2007) has analyzed the impacts of stock price changes to mergers and acquisitions behavior taken place in banking industry with particular reference to private and public sector banks. Found that share prices are market sensitive. From the financial analysis it was noted that greater part of the banks went for branch extension and this has affected profitability to some extent and it resulted in harmful competition among the players. To add up the review of literature, many offerings have offered diverse perspectives of merger in different industries globally and explained the valuation techniques followed by merging companies, and shareholders possessions effect due to merger. From the review of several papers evaluating the pre and post merger performance of merged companies, it is incidental that majority of the studies powerfully support the concept of improved post merger performance due to merger and it is valuable to the acquirer companies. METHODOLOGY Methodology of the study Sample selection There are several mergers within the TATA Group during the study period from 01.04.2006 to 31.03.2009. For the purpose of corporate analysis, it was decided to select three of the highest deals which merged/ acquired under the TATA Group during the study period. Hence, the sample size of this study is confined to 3. Besides, while selecting the sample, following points were taken into account. Acquirer and target companies ought to belong to the same industry. Availability of information on the merger and industry. Period of the study The present study covers a period of one year from April 1, 2006 to March 31, 2009. But in order to evaluate the financial performance of sample companies on a comparative basis, 15-20 days before merger and after merger were considered. Sources of data The present study fundamentally depends on secondary data. The required data on financial performance prior and post merger were composed and they were obtained from Prowess software, Internet sources, Business Journals (ICFAI JOURNAL ON M A) The data were also collected from books, and newspapers. Tools used In order to study the financial performance of acquirer and target companies, ratios Debt-Equity Ratio, ROCE (%),net profit margin, P/E, EPS, OPM(%) and valuation. (1) Analysis of financial performance The pre-merger average performance of the companies were compared with the post- merger performance of the joint firm. The present study attempts to calculate and study the pre and post merger performance of acquirer and target companies by using financial ratios in order to determine whether mergers resulted in shareholders wealth or not. Accordingly, the following null hypothesis has been tested: H0: The post merger financial performance of the combined firm is not significantly different from the aggregate performance of the acquirer and target companies prior to the merger. (2) Ratios Debt-Equity Ratio: A gauge of a companys financial leverage obtained by dividing  the total liabilities  by  stockholders equity. It shows what proportion of equity and debt the company is presently using to finance their assets. Return On Capital Employed (ROCE) : ROCE compares earnings with the invested capital in the company. It is like Return on Assets (ROA), but also considers sources of financing Net profit margin: The profit margin says how much profit a company makes for every 1 Rupee it generates in revenue or sales. Profit margins vary with industry to industry, but all else being equal, the greater a companys profit margin compared to its competitors, the better. P/E: It is a gauge of the price paid for a share relative to the annual net income or the net profit earned by the firm per share. EPS: The portion of a companys profit which is allocated to each outstanding share of common stock.  Earnings per share  acts as an indicator of  a companys profitability. OPM: Operating margin is a measurement of the proportion of a companys revenue that is left over after variable costs of production such as wages, and raw materials have been paid. A healthy operating margin is required for a company to be able to pay for its fixed costs, such as interest on debt. Also known as operating profit margin and net profit margin. (3) Enterprise Value Enterprise value is a figure that, in theory, represents the entire cost of a company if someone were to acquire it. Enterprise value is a more accurate estimate of takeover cost than market capitalization because it takes includes a number of important factors such as preferred stock, debt, and cash reserves that are excluded from the latter metric. ANALYSIS OF DATA TATA GROUP OF COMPANIES One of the Indias largest business groups in the country. It has about 96 operating companies. Diverse business in 7 sectors. Revenues equivalent to 5.3% of Indias GDP. Group revenue FY 2008: Rs 251,543 Cr. / $ 62.5 b. Group profit FY 2008: Rs 21,578 Cr. / $ 5.4 b .Its 27 publicly listed companies have a combined market capitalization which is the 2nd highest among all business houses in India. Largest employer in private sector over 300,000 employees. A shareholder base of over 2.9 million. Operations in over 80 countries. Products and services exported to 85 countries Tata is a rapidly growing business group based in India with significant international operations. Revenues in 2007-08 are estimated at $62.5 billion (around Rs251, 543 crore), of which 61 per cent is from business outside India. The group employs around 350,000 people worldwide. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics. The business operations of the Tata group currently encompass seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. The groups major companies are beginning to be counted globally. Considering two of the largest mergers of TATA Group -Tata Steel became the sixth largest steel maker in the world after it acquired Corus. -Tata Communications is a leading global provider of a new world of communications. With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers. TATA STEEL-CORUS About the acquisition Date: 30th March 2007 Acquirer: Tata Steel Limited Target company: Corus Plc. Stake: 100 % Deal amount: US$ 12201 m Sector: Steel sector MERGER On January 31, 2007, India based Tata Steel Limited (Tata Steel) acquired the Anglo Dutch steel company, Corus Group Plc (Corus) for US$ 12.20 billion. The merged entity, Tata-Corus, employed 84,000 people across 45 countries in the world. It had the capacity to produce 27 million tons of steel per annum, making it the fifth largest steel producer in the world as of early 2007. Before the acquisition, the major market for Tata Steel was India. The Indian market accounted for sixty nine percent of the companys total sales. Almost half of Corus production of steel was sold in Europe (excluding UK). The UK consumed twenty nine percent of its production. After the acquisition, the European market (including UK) would consume 59 percent of the merged entitys total production. DEAL : An auction was initiated on January 31, 2007, and after nine rounds of bidding, TATA Steel could finally clinch the deal with its final bid 608 pence per share, almost 34% higher than the first bid of 455 pence per share of Corus. Synergies There were many likely synergies between Tata Steel, the lowest-cost producer of steel in the world, and Corus, a large player with a significant presence in value-added steel segment and a strong distribution network in Europe. Among the benefits to Tata Steel was the fact that it would be able to supply semi-finished steel to Corus for finishing at its plants, which were located closer to the high-value markets The Pitfalls Though the potential benefits of the Corus deal were widely appreciated, some analysts had doubts about the outcome and effects on Tata Steels performance. They pointed out that Corus EBITDA (earnings before interest, tax, depreciation and amortization) at 8 percent was much lower than that of Tata Steel which was at 30 percent in the financial year 2006-07 COMPANYS RETURN BEFORE AND AFTER ACQUISITION PRE-ACQUISITION POST-ACQUISITION FINDINGS As we can see from the line chart that the %cumulative abnormal return before acquisition was sharply decreasing since past month with not even a single glimpse of positive return on any single day. But as soon as the acquisition took place, the earnings showed a marginal rise and again got back to the level where it was just before the acquisition. This happened due to very large debt generated due to overpaying by acquiring the Corus at a very high price of 608 pence per share as compared to previously valued 455 pence per share. INTERPRETATION Debt equity ratio on post acquisition increase because Corus debt was high it was GBP1.6b to buy Corus and so its debt is almost 116% more than in pre acquisition. ROCE shows that post acquisition is very less as compared to pre acquisition it has negative percentage because company has short term returns after one year it will improve in the long run. Net profit margin has very less change as profit is not much affected. P/E increases in post acquisition by 30.2% which show high future cash flow. ROE is decreasing by 37.7 which show that it has more debt than equity. EPS has a very minor change. Operating profit margin is reduced by 9.1% which shows that it has low profit. TATA COMMUNICATION-NTT DOCOMO About the acquisition Date: 13th November 2008 Acquirer: Ntt-Docomo Target company: Tata Teleservices Ltd. Stake: 26 % Deal amount: US$ 2700 m Sector: Tele-communication MERGER Tata Teleservices has sold a stake of 26% to Japans NTT DoCoMo. The deal value is $2.7 bn. Tata Tele has 30 million CDMA subscribers and is rolling out its GSM services. Some say the deal is over-valued and some say its not easy to put value on the fastest growing mobile market in the world. India is the fastest growing market second only to China. It adds 10mn subscribers every month. The current subscriber base stands at 300+million and is expected to be 700 million in 2012. That is almost double to todays numbers. The Road ahead Great deal it may be, but it has its risks. One reason is that telecom deals have been controversial in recent times. This goes back to late last year when the government sold pan-India licenses for $333 million apiece, amid a welter of controversy. DoCoMo, in accordance with regulations of the Securities and Exchange Board of India, expects to make an open offer to acquire up to 20 per cent of outstanding equity shares of Tata Teleservices Maharashtra (TTML), a Tata telecommunication company, through a joint tender offer along with Tata Sons. TTSL and TTML through the Tata Indicom brand, have increased their combined share of the fast-growing Indian mobile market and their combined subscriber base now stands at over 30 million. TTSL expects to leverage DoCoMos expertise in the development and delivery of value-added services, where DoCoMo is a firmly established market leader. FINDINGS Debt equity ratio on post acquisition debt is increasing which shows company debt is increasing after merger. ROCE is constant it has not change much.Net profit margin increases by 11.10 as it income increases in post acquisition as compared to pre acquisition. P/E highly increases in post acquisition from 0 to 12%. ROE is decreasing by 1.53% which shows that it slightly more debt than equity. EPS is increasing drastically by 24.27% which is very profitable for investors. Operating profit margin is increased by 15.43% which shows that company profit margin is very fairly profitable. COMPANYS RETURN BEFORE AND AFTER ACQUISITION PRE-ACQUISITION POST-ACQUISITION INTERPRETATION The return of the target company Tata Communication has been very poor since the past 15 to 20 days before the acquisition but it almost got to break-even soon after the acquisition date. This sustained for the next 8 to 10 days but again got back into negative returns zone due to poor customer support to the newly entered Docomo brand in highly competitive communications market in India. TATA MOTOR JLR About the acquisition Date: 27th March 2008 Acquirer: Tata Motors Ltd Target company: Jaguar Land Rover Stake: 100 % Deal amount: US$ 2300m Sector: Automotive Detailed Case Study In June 2008, India-based Tata Motors Ltd. announced that it had completed the acquisition of the two iconic British brands Jaguar and Land Rover (JLR) from the US-based Ford Motors for US$ 2.3 billion. Tata Motors stood to gain on several fronts from the deal. One, the acquisition would help the company acquire a global footprint and enter the high-end premier segment of the global automobile market. After the acquisition, Tata Motors would own the worlds cheapest car the US$ 2,500 Nano, and luxury marquees like the Jaguar and Land Rover. Though there was initial skepticism over an Indian company owning the luxury brands, ownership was not considered a major issue at all. According to industry analysts, some of the issues that could trouble Tata Motors were economic slowdown in European and American markets, funding risks, currency risks etc. The Challenges Morgan Stanley reported that JLRs acquisition appeared negative for Tata Motors, as it had increased the earnings volatility, given the difficult economic conditions in the key markets of JLR including the US and Europe. Moreover, Tata Motors had to incur a huge capital expenditure as it planned to invest another US$ 1 billion in JLR. This was in addition to the US$ 2.3 billion it had spent on the acquisition. Tata Motors had also incurred huge capital expenditure on the development and launch of the small car Nano and on a joint venture with Fiat to manufacture some of the companys vehicles in India and Thailand. This, coupled with the downturn in the global automobile industry, was expected to impact the profitability of the company in the near future CURRENT SCENARIO In less than three years after its acquisition, Jaguar Land Rover has metamorphosed from a millstone around Tata Motors neck into its crowning jewel. In the June 2010 quarter, JLR division accounted for nearly 70% of the companys net profit and over 60% of its revenues on the consolidated basis. This was more than what the market has expected and the stock is up by nearly 150% in the past two trading sessions. JLR benefited from an improvement in its pricing power and a favourable exchange rate in the US dollar and the euro. The two worked in tandem and resulted in a sharp 60% jump in JLR revenue per unit to around  £38,000 in June 2010 quarter compared to the  £23,800 a year ago. With the raw material costs remaining benign, it led to a sharp improvement in the divisions operating margin and its reported net profit of  £221 million (`1,613.3 crore) in the first quarter as against a net loss of  £64 million (`467 crore) a year ago. FINDINGS Debt equity ratio is increasing by 42.27% as Tata took loan of banks to acquire JLR.ROCE increases vey high by 343.60% as compared to pre acquisition as it gauges that company that generate its earnings from the total pool of capital which indicates profitability.Net profit margin increases as it income increases in post acquisition as compared to pre acquisition. P/E highly decreases in post acquisition by 60.1% which in investor point of view they will be profitable to invest to get high earning. ROE is highly increasing by 480.15% which shows that it has more equity than debt. EPS is increasing drastically by 480.15% which is very profitable for investors. Operating profit margin is reduced by 41.44% which shows that company profit margin is very less. COMPANYS RETURN BEFORE AND AFTER ACQUISITION PRE-ACQUISITION POST-ACQUISITION INTERPRETATION As we can see from the line chart that the cumulative return before merger was negative and the entire trend is moving in the negative direction due to poor returns of tata motors. A soon as the acquisition took place, the highly profit generating Jaguar as well as Land Rover added to the profit and earnings of the tata motors. The brand value of JLR added to the highly reputable Tata Group and the companys balance sheet. This can be clearly seen in the line chart above. VALUATION AND INTERPRETATION EV Multiples of Tata Corus Tata Steel and Corus Group deal happened at high multiples compared to its peers. We can observe that the average multiples of the peer group company stands half compared to the deal multiples. Sales Multiple: The average sales multiple of its peers is 1.17x compared to the deal of 0.68x of Corus Groups sales. This can be possible due to high sales value, reducing the multiple to 0.68x. The lowest multiple (Steel Authority of India) is at 0.73x. EBITDA Multiple: EBITDA multiple of its peers averages at 4.38x compared to the deal multiple of 7.02x of Corus Groups sales. Even the highest multiple (Jindal Steel Power) is at 4.38x. This is almost half of the deal multiple. It can be observed that Tata played very aggressively. EBIT Multiple: EBIT multiple of its peers averaged at 5.54x compared to the deal of 10.19x of Corus Groups sales. Even the highest multiple (Jindal Steel Power) is at 8.39x. PE Multiple: The PE multiple of the deal is very high on the account that the margins of Corus are very low compared to Tata Steel and other peers. The average PE multiples is 7.95x compared to 68.23x at which the deal haapened. EV Multiples of Tata NTT Docomo The deal of Tata Teleservices and NTT Docomo happened at very high multiples. We can observe that the average multiples of the peer group company stands very low compared to the deal multiples. Sales Multiple: The average sales multiple of its peers is 5.37x compared to the deal of 26.98x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 9.24x. Thus we can conclude that Tata Teleservices got very good price for its stake dilution for NTT Docmo. EBITDA Multiple: Again the average EBITDA multiple of its peers is very less, 16.35x compared to the deal of 99.81x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 26.74x. This is a huge difference. NTT Docomo paid 6 times more what it should have paid to Tata. EBIT Multiple: EBIT multiple of its peers is 25.5x compared to the deal of 952.96x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 41.02x. PE Multiple: The PE multiple for Tata Teleservices is negative as its net income is negative Note: The multiples are high on account that Sales and the profitability of Tata Teleservices is low, inturn giving very high multiples. Its sales stands at Rs. 1,815.5 Cr. compared to the average sales of Rs. 11,490.6 Cr. of its peers. FINDINGS FROM VALUATION OF ENTERPRISE VALUE MULTIPLE Tata Corus Tata Steel and Corus Group deal happened at high multiples compared to its peers. We can observe that the average multiples of the peer group company stands half compared to the deal multiples. Even the highest multiple (Jindal Steel Power) is at 4.38x. This is almost half of the deal multiple It can be observed that Tata played very aggressively as it paid high enterprise value as compared to our analysis. A reason for Corus to be sold is chance to Bail out of Debt and Financial stress. TATA Steel Paid 7.02 Times EBITDA of Corus Enterprise Value. The PE multiple of the deal is very high on the account that the margins of Corus are very low compared to Tata Steel and other peers the only company who has high P/E is Jindal steel. Tata NTT Docomo The deal of Tata Teleservices and NTT Docomo happened at very high multiples. We can observe that the average multiples of the peer group company stands very low compared to the deal multiples. The average sales multiple of its peers is 5.37x compared to the deal of 26.98x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 9.24x. Thus we can conclude that Tata Teleservices got very good price for its stake dilution for NTT Docomo. The PE multiple for Tata Teleservices is negative as its net income is negative. EBITDA multiple of its peers is very less, 16.35x compared to the deal of 99.81x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 26.74x. This is a huge difference. NTT Docomo paid 6 times more what it should have paid to Tata. The multiples are high on account that Sales and the profitability of Tata Teleservices is low, in turn giving very high multiples. Its sales stands at Rs. 1,815.5 Cr. compared to the average sales of Rs. 11,490.6 Cr. of its peers. SUMMARY Except Tata Steel- Corus deal, all the other 2 acquisitions was well accepted by not only well accepted by the owners of the company (the shareholders) but even made the entire Tata group come into the eyes of fortune 500 list. In-fact it ranked at 56th position at a global level in 2009 CONCLUSION This study was undertaken to test what is the impact of mergers on the financials of acquiring corporate by examining some pre- merger and post-merger financial, in terms of impact on operating performance. The results from the analysis of pre- and post-merger operating performance ratios for the acquiring firms in the sample showed that there was a differential impact of mergers, for different industry sectors in India. Type of industry does seem to make a difference to the post-merger operating performance of acquiring firms. Expansion through mergers and acquisition is one of the best ways for any domestic company to step outside the shores of India in an international market place and acquit itself as a global player Company can turn into conglomerate in reasonably less time by capitalizing on its strengths of efficiency and effectiveness by acquiring relatively poor performing companies as TATA did in almost all its group of companies Recent examples of companies which adopted similar pattern of expansion are Renuka Sugars, Arcelor Mittal, Reliance, Essar Group, Aditya Birla Group, etc. One can study any of the above mentioned company and conclude that the key underlying decision of these companies expanding quickly and efficiently is their timely decision of merging and acquiring appropriate companies

Waiting for a Title :: Essays Papers

Waiting for a Title Who is Nabokov, What is Humbert? Sugar and spice and everything nice, that's what little girls are made of, or at least that's what they are supposed to be made of. After reading Vladimir Nabokov's Lolita, written almost a half a century ago, one must wonder what he was thinking as he penned the book. Nabokov tells us in his essay, "On a Book Entitled Lolita," that his sole purpose in writing such a controversial novel, had "no purpose other than to get rid of that book"(Brink 311). Nabokov's not-so-clear explanation leads many minds to wonder about the "true meaning" of Lolita. One of the most often asked questions, is, of course, Nabokov's personal sexual preference: was he a pedophile? It seems unimaginable that a person could write the tale of such an incredible obsession and that, that obsession could be pure fiction: "The patterns of Lolita have psychological as well as aesthetic significance, and Humbert's language is more than a virtuoso display of effects: it is a strong but delicate instrument that registers the slightest, as well as the wildest, occillations of Humbert's distressed mind and heart"(Pifer 110). One example of Humbert's obsession with Lolita can be found on page 65 in The Annotated Lolita: I knew I had fallen in love with Lolita forever; but I also knew she would not be forever Lolita. She would be thirteen on January 1. In two years or so she would cease being a nymphet and would turn into a "young girl," and then into a "college girl"--that horror of horrors. The word "forever" referred only to my own passion, to the eternal Lolita as reflected in my blood. The Lolita whose iliac crests had not yet flared, the Lolita that today I could touch and smell and hear and see, the Lolita of strident voice and the rich brown hair--of the bangs and the swirls at the sides and the curls at the back, and the sticky hot neck, and the vulgar vocabulary--"revolting," "super," "luscious," "goon," "drip"--that Lolita, my Lolita, poor Catullus would lo se forever. So how could I afford not to see her for two months of summer insomnias? Two whole months out of the two years of her remaining nymphage." For any reader, among the main issues of Lolita are representations of incest, child-molestation, obsession, and pedophilia. This essay will examine relevant details in Nabokov's biography and attempt to discover the connection between Humbert Humbert and Nabokov. Waiting for a Title :: Essays Papers Waiting for a Title Who is Nabokov, What is Humbert? Sugar and spice and everything nice, that's what little girls are made of, or at least that's what they are supposed to be made of. After reading Vladimir Nabokov's Lolita, written almost a half a century ago, one must wonder what he was thinking as he penned the book. Nabokov tells us in his essay, "On a Book Entitled Lolita," that his sole purpose in writing such a controversial novel, had "no purpose other than to get rid of that book"(Brink 311). Nabokov's not-so-clear explanation leads many minds to wonder about the "true meaning" of Lolita. One of the most often asked questions, is, of course, Nabokov's personal sexual preference: was he a pedophile? It seems unimaginable that a person could write the tale of such an incredible obsession and that, that obsession could be pure fiction: "The patterns of Lolita have psychological as well as aesthetic significance, and Humbert's language is more than a virtuoso display of effects: it is a strong but delicate instrument that registers the slightest, as well as the wildest, occillations of Humbert's distressed mind and heart"(Pifer 110). One example of Humbert's obsession with Lolita can be found on page 65 in The Annotated Lolita: I knew I had fallen in love with Lolita forever; but I also knew she would not be forever Lolita. She would be thirteen on January 1. In two years or so she would cease being a nymphet and would turn into a "young girl," and then into a "college girl"--that horror of horrors. The word "forever" referred only to my own passion, to the eternal Lolita as reflected in my blood. The Lolita whose iliac crests had not yet flared, the Lolita that today I could touch and smell and hear and see, the Lolita of strident voice and the rich brown hair--of the bangs and the swirls at the sides and the curls at the back, and the sticky hot neck, and the vulgar vocabulary--"revolting," "super," "luscious," "goon," "drip"--that Lolita, my Lolita, poor Catullus would lo se forever. So how could I afford not to see her for two months of summer insomnias? Two whole months out of the two years of her remaining nymphage." For any reader, among the main issues of Lolita are representations of incest, child-molestation, obsession, and pedophilia. This essay will examine relevant details in Nabokov's biography and attempt to discover the connection between Humbert Humbert and Nabokov.