View
218
Download
0
Category
Preview:
Citation preview
11
June 15, 2013
Press Information Booklet
2
Mahindra + CIE Global AllianceOverview
Mahindra & Mahindra (M&M), India and CIE Automotive (“CIE”), Spain enter into a
global alliance in the component business
Cross investment by both groups
– M&M to invest in CIE Automotive (Spain)
– CIE’s Brazilian listed subsidiary−Autometal−to invest in the component businesses
of M&M’s Systech Sector (Mahindra Systech)
Amalgamation of all component companies of Mahindra Systech into an India-listed
component supplier with partnership of CIE (Mahindra CIE Automotive) consisting of
– Mahindra Systech’s Automotive Components business (FY13 Sales ~ INR 4,000
Cr/EUR 580 mn) with operations in India, UK, Italy and Germany
– CIE’s European Forgings business (CY12 Sales ~ INR 1,050 Cr/EUR 150 mn) with
operations in Spain and Lithuania
3
Mahindra + CIE Global AllianceM&M to be a Partner at 2 levels–CIE Group, Spain & Mahindra CIE Automotive, India
Mahindra Systech
CIE Automotive
CompositesForgings
StampingsCastings +
Magnetics
Gears
Autometal
Bio Fuels
Inf. & Comm.
Tech
Mahindra CIE
Automotive Limited
Machining
M&M
Indicates transaction
Indicates merger
Stampings
Aluminium
Plastics
Forgings*
Brazil
Mexico
Listed company* CIE Forgings plants in Spain & Lithuania
USA
China
Note:
Mahindra Systech is not a legal entity
All companies, listed or unlisted, will be merged into Mahindra
Forgings Ltd. to be renamed as Mahindra CIE Automotive Ltd
Forgings, Machining
Castings, Stampings,
Plastics, Painting
Aluminum, Forgings,
Machining, Stampings,
Plastics, Painting
Plastics
Forgings
4
Industry CharacteristicsGlobal presence especially in emerging economies vital for suppliers
Source: Society of Indian Automobile Manufacturers database, ACMA, McKinsey, CSM
Global Product
Convergence
Localization
AcceleratingIndia becoming an
important auto hub
Passenger Vehicle
platforms and standards
converging globally
Emerging trend in Heavy
Trucks
Customers seeking global
suppliers for global
platforms (OEMs and
Tier1s)
The Alliance extends the reach of CIE into India and Mahindra to the Americas and China
Volume growth in BRIC
markets driving localization
(OEMs achieving scale)
Tariff regimes benefit local
content
CIE customers seeking
local content in India
Mahindra Systech
customers seeking local
content in Americas
Local Light Vehicle output
grows from 3 M (2010) to 7
M (2017)
16% of Indian car
production currently
exported
Small car hub: Suzuki Alto,
Hyundai i10, Nissan Micra
Most global car & truck
OEMs in India
5
Industry StructureAs industry consolidates via acquisitions/partnerships, global presence is key
1. Global OEMs only; local OEMs not taken into accountSource: Boston Consulting Group, E&Y
60
40
20
30,000
20,000
10,000
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
Nu
mb
er
of
Au
tom
oti
ve O
EM
s1
Nu
mb
er o
f su
pp
liers
Supplier consolidation is faster than OEM consolidation
Global presence (emerging + developed world) becoming key for suppliers
6
Rationale for Mahindra CIE AllianceCreates global alliance; realises „One Systech‟ vision
Transaction Rationale
Creates a larger and
diversified auto-
components business
Ensures larger product and
technology portfolio;
addresses continuously
upgrading operational
requirements
Enables global presence
especially in key emerging
markets
Realizes vision of
“OneSystech” - Large listed
Indian auto component
company
Builds on Shared Values
Supports CIE customers in
India; Supports Mahindra
customers in other markets
M&M + CIE Systech + CIE Forge
7
Rationale for Mahindra CIE AllianceMahindra + CIE will be a large global component group
Segments
Market
Position
CIE Automotive
Size
(Eur mn)
Mahindra Systech
Forgings, Castings, Composites,
Stampings, Gears
575 (FY2013)
Markets India, Germany, UK, Italy
1,647 (CY2012)
Forgings, Castings, Composites, St
ampings, Roof Systems
NAFTA, Mercosur, Europe, China,
Russia, Morocco
EUR 1 = INR 70
Amongst large Indian auto comp groups
with focus on : Crankshafts for Cars+UVs
in India & Heavy Truck Forgings in Europe
Amongst large European, Brazilian and
Nafta auto component groups
8
Rationale for Mahindra CIE AllianceMahindra + CIE will have presence in most key automotive markets
A Globally Networked Auto Supplier
Source: CSM
4W Vehicle Production Volumes 2011 vs 2017
Total Sales of the global
alliance: EUR 2.2 bn/
Rs 15,000cr. , of which BRIC
~40%
Presence in all key markets
(except Korea/Japan)
Exchange Listings in India,
Brazil, Spain
EUR 1 = INR 70
9
Rationale for Mahindra CIE AllianceMahindra + CIE have complementary product market presence
Process EU NAFTA Brazil Russia India China
Stampings
Forgings1
Gears/ Machining2
Plastics
Aluminium
Castings
Painting
Roof Sys.
Composites
Magnets
1. Forgings in EU largely complementary – CIE serves car markets while Systech serves CV market
2. Gears/ Machining complementary – Systech manufactures gears while CIE machines other componentsCIE Presence Systech Presence
10
Rationale for Mahindra CIE AllianceLarge listed multi technology co. in India with BRIC linkages & global knowhow
Higher value for shareholders
Higher ability to capture synergies
Enhanced ability to make investments
Greater focus on engineering for differentiation
What CIE brings
Access to car markets of Europe, Brazil, Mexico
Large product and technology portfolio
Proven and successful global business model
One Systech key benefits:
Mahindra CIE Alliance key benefits:
“ONE SYSTECH + CIE FORGINGS (EUROPE)”
What Systech brings
Access to Indian auto market
Access to truck & off road markets of Europe
One
Systech
Mahindra Castings
Gears India MUSCO (Stampings)
Gears Europe Mahindra Forgings
Mahindra Composites
CIE Forging IBERIA Global Customers
Know-How
Business Model/
Management
CIE Forging Lithuania
One
Systech
Mahindra CIE
On
e S
yste
ch
Gro
up
11
Rationale for Mahindra CIE AllianceMahindra CIE create a “Global Forgings Powerhouse”
Main
Products
CIE Forgings
Crankshafts + Spindles
+ Hubs for cars
Mahindra Forgings
Europe
Axle Beams and other
CV Forgings
Size
(Eur mn) 150258
Mahindra Forgings
India
Crankshafts + Steering
Knuckles for cars + UVs
63
*CY2012/ FY2013
New Mahindra-CIE Forgings Business
Key
Markets
Car c/shafts in Europe
(~2.5mn pcs/ yr)Commercial vehicle
forgings in Europe
Forged c/shafts for cars/
UVs in India (~1mn pcs/ yr)
12
Overview of Mahindra Systech
Business Overview Financial Summary
Sales By Business Corporate Structure
INR mn FY11 FY12 FY13
Sales: India 14,377 18,205 18,151
Sales: Europe 19,246 24,843 21,991
Sales: Total 33,623 43,048 40,142
*1 Euro = INR 70.0
Systech Sector
Largest part of Mahindra’s Systech Sector (~80%)
FY13 Sales of ~INR 40,000 mn / EUR 580 mn
19 Manufacturing facilities in India, Germany, UK,
Italy
55% of revenues from European operations
Auto
ComponentsSteel
Engg Services
Aerospace
Listed:
Mahindra Forgings (India, Germany, UK)
[M&M: 53%]
MUSCO Stampings (India) [M&M: 50.7%]
Mahindra Composites (India) [M&M: 35.4%]
Private:
Mahindra Hinoday (Castings + Magnets,
India) [M&M: 65%]
Mahindra Gears (India) [M&M: 76.7%]
Metalcastello (Gears, Italy) [M&M: 51%]
Not Part of Transaction
Forgings55%
Castings9%
Gears13%
Stampings19%
Others4%
[M&M: Shareholding]
13
Overview of CIE Automotive
Company Overview Financial Summary
Shareholding Pattern of CIE Corporate Structure
Listed in Spain with a significant subsidiary listed in
Brazil
Key business areas include
forgings, machining, stampings, casting, plastics, Alu
minum and painting.
Locations -
Europe, Brazil, Mexico, USA, China, Russia, Morocco
EUR Mn CY 10 CY 11 CY 12
Sales 1,591 1,840 1,647
EBITDA 193 234 224
EBITDA margin 12.1% 12.7% 13.6%
PAT 41 61 61
Net Debt 507 342 394
Source: Company Filings; Bloomberg, 1 EUR = 2.66 BRL
CIE
(Spain)
Sales: Eur 1,647 mn
EBITDA: Eur 224 mn
Market Cap: Eur 659 mn
75%
Autometal
(Brazil)
Sales: Eur 641 mn
EBITDA: Eur 108 mn
Market Cap: Eur 978 mn
Key Businesses:
Aluminum
Forgings
Castings
Stampings
Machining
Plastics
Non key businesses:
Biofuels
IT
Gestamp25.9%
Management Team / Family Office24.4%
Institutions18.5%
Free float 21.5%
T.S.10.0%
14
Mahindra CIE Automotive LimitedHow would Mahindra CIE look like on F13 numbers
M&M CIE Public
Mahindra CIE
Multi-Technology Platform (Rs cr.)
Forgings
Castings + Magnets
Composites
Gears
Stampings
~3270
~480
~50
~500
~770
Mahindra CIE will be a Large Listed Multi Technology Multinational Company
20.18% 51.12% 28.70%
* FY13 Sales in INR Crores
Total ~5070
Systech Autocomp cos.
~Rs 4000cr.
CIE Forge cos.
~Rs 1000cr.
15
Transaction Structure (Step 1)CIE/Autometal to purchase stakes in MFL, MCL and MHIL
M&M
Mahindra
Forgings
Mahindra
Composites
Mahindra
Hinoday
Industries
CIE
(Spain)
PIA 2
(Spain)
Autometal
(Brazil)
Share
Purchase +
Open Offer
Share
Purchase +
Open Offer
Share
Purchase
75%
72%
28%
CIE
Forgings
PIA 3
(Spain)
100%
100%
53.0%
30.0%
64.9%
79.2%
61.7%
64.9%
*Assuming 100% open offer subscription
MIIPL (1)
MGIL (2)
MUSCO
100%
100%
50.7%
(1)MIIPL holds M&M’s investment in MGTPL (Gears India)(2)MGIL holds M&M’s investment in MGGL which holds ~95% in Metalcastello (Gears Europe)
MHL holds 5% in MCL, Mahindra Family owns 4.8% in MUSCO & 9.4% in MCL
16
Transaction Structure (Step 2)Mahindra CIE is created via a merger of Systech Companies & CIE Forgings
Mahindra CIE
Automotive *
Mahindra
Composites
Mahindra
Investments
(India)
Mahindra
Gears
International.
Mahindra
Hinoday
CIE Forgings
MUSCO
Mahindra Gears &
Transmission (India)
Metalcastello
(Italy)
Merger
M&M
Autometal ~20%
13.5%
~75%
*Mahindra Forgings is proposed to be renamed as Mahindra CIE Automotive
Mahindra Forgings
(Europe)
PIA 2
(Spain)
72 %
28%
~51%
CIE
PIA 3
Mahindra Family to hold ~1% in Mahindra CIE Automotive Ltd.
17
Swap Ratios
Company Swap Ratio
MHIL 110
MCL 90
MIIPL 17
MGIL 20
MUSCO 284
PIA 3 105
No of shares of MFL to be issued for every 100 shares of companies as below:
18
Estimated Timeline & Regulatory Approvals
Event Estimated Dates
Transaction Signing June 15, 2013
Closure of Open Offer* Oct, 2013
Receipt of High Court Approval April, 2014
Regulatory Approvals
Competition Commission of India
Bundeskartelamt, Germany (Anti-Trust Authority)
SEBI Clearance for the Letter of Offer (Open Offer)
High Court and shareholders’ approval for the merger
Timeline
*Subject to receipt of regulatory approvals
19
Advisors
Transaction Advisor
Fairness Opinion provider for Mahindra Forgings
Limited
Fairness Opinion provider for Mahindra CompositesLimited
Fairness Opinion provider for MUSCO
Valuers providing Swap Ratios for MergerNM RAIJI
Legal Advisors
Diligence Advisors
S R BATLIBOI
2020
Thank you
Recommended