Mergers & Acquisitions

SHIVA Capital has developed a Mergers & Acquisitions practice that is unique among the world’s top M&A advisors by its focus on covered industrial segments and international markets, becoming an acknowledged specialist for in- and outbound transactions between Germany on one hand and Russia, India and China on the other hand.

Over more than 10 years we have managed to position ourselves as a preferred partner for Russian, Indian and Chinese industrial players to get a footprint in Germany and partially also Europe. At the same time we have been able to advise and accompany the German Mittelstand on entering the promising markets of Russia, India and China, either by acquiring brown-field, starting green-field or just partnering in joint-ventures.

The dominant rationale used to explain Mergers & Acquisitions is that the acquiring firms seek improved strategic, operative and/or financial performance. The following reasons are considered to add substantial value:

• Synergy – this refers to the fact that the combined company can often reduce functional over-capacity, lowering the costs of the company relative to the same revenue stream, thus increasing profit.
• Increased Revenue and Market Share – this motive assumes that the company will be absorbing a major competitor and thus increase its power (by capturing additional market share) to set prices.
• Cross- and/or Up-Selling – for example, a bank buying a stock broker could then sell its banking products to the stock broker’s customers, while the broker can sign up the bank’s customers for brokerage accounts.
• Economies of Scale– these can be managerial economies, but in most cases one will find economies of scale in procurement, and production, logistics and partially in marketing and sales.
• Taxes – a profitable company can buy a loss maker to use the target’s loss as their advantage by reducing their tax liability. In many countries, rules are in place to limit the ability of profitable companies to “shop” for loss making companies, limiting the tax motive of an acquiring company.
• Geographical Diversification – this is designed to smooth the revenue stream of a company, which over the long term smoothens the stock price of a company, giving conservative investors more confidence in investing in the company.
• Vertical Integration – vertical integration occurs when an upstream and downstream firm merges with or acquires the other one.

SHIVA Capital executes innovative and customized solutions to complex assignments, such as acquisitions, divestures, mergers, joint ventures, restructuring, spin-offs, leveraged and management buyouts, private equity investing, special situations and shareholder and government relations.