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Motherson's Acquisition Strategy-Boon or Bane

Motherson Sumi Systems (MSSL) is an automotive component manufacturer that has pursued an aggressive acquisition strategy. The document outlines several acquisitions MSSL has made, including Visiocorp in 2009, Peguform in 2011, Stoneridge's wiring harness business in 2014, and PKC Group PLC in 2017. It also discusses MSSL's business portfolio, SWOT analysis, functional strategies regarding human resources, operations, and technology, and financial performance for 2019-20. The strategies followed by MSSL emphasize diversification, reliance on technology, expertise in integrating acquired companies, and importance of planning.

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Tangirala Ashwini
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74 views

Motherson's Acquisition Strategy-Boon or Bane

Motherson Sumi Systems (MSSL) is an automotive component manufacturer that has pursued an aggressive acquisition strategy. The document outlines several acquisitions MSSL has made, including Visiocorp in 2009, Peguform in 2011, Stoneridge's wiring harness business in 2014, and PKC Group PLC in 2017. It also discusses MSSL's business portfolio, SWOT analysis, functional strategies regarding human resources, operations, and technology, and financial performance for 2019-20. The strategies followed by MSSL emphasize diversification, reliance on technology, expertise in integrating acquired companies, and importance of planning.

Uploaded by

Tangirala Ashwini
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Motherson’s

Acquisition Strategy-
Boon or Bane

Group A2
•Harshini G 19021
•Mridul Jain 19031
•Pallavi N 19035
•Prabjot Kaur 19037
•Prakash 19038
• Motherson sumi systems is one of the world's leading specialized
automotive component manufacturing companies for Original
Equipment Manufacturers (OEMs).
• The company was incorporated with the objective of manufacturing
integrated wiring harnesses wires high tension cords and components
for integrated wiring harnesses including plastic and metal parts.
• On 2 January 2009. MSSL subsidiary Samvardhana Motherson
Visiocorp Solution Ltd. (SMVSL) has acquired all the subsidiaries of
Visiocorp plc (in administration) for a cash consideration of
approximately Euro 25 million and allotment of 5% consideration
INTRODUCTION shares having face value of Euro 1.5 million.
• On 13 July 2011, MSSL acquired 80% of shareholding of Peguform
Group.
• On 27 May 2014 MSSL had signed an agreement to acquire the Wiring
Harness business of Stoneridge Inc. through asset purchase at
consideration of US $ 65.7 million on no cash no debt basis.
• On 19 January 2017,MSSL and PKC entered into an combination
agreement, where MSSL launched a voluntary recommended public
tender offer for the acquisition of all issued and outstanding share
capital and voting rights of PKC group.
Business Portfolio

WIRING VISION MODULES & TECHNOLOGY & METAL


HARNESS SYSTEMS POLYMER SOFTWARE PRODUCTS
PRODUCTS

LOGISTICS AEROSPACE HEALTH &


MEDICAL
Strength Weakness
1. Strong channels of distribution 1. High operational cost
2. Cordial employer-employee relationship 2. Lack of marketing department
3. Unique and high brand image
4.Company with decreasing promoter
pledge
SWOT
Opportunities Threat
1. Tie-up with foreign automotive 1. Rupee depreciation resulting in lower
companies export realization
2. Access to global source for raw material 2. Increasing transportation costs
at competitive prices
Threat of New Entrants
• De-licensing has opened the market to new
entrants
• Technology and quality demands are very
Porter’s 5 stringent
• Other advantages to existing players include
Forces customer service and distribution network
Model Bargaining power of suppliers
• Bargaining power is low for high technology
products
• Unorganized sector dominates the domestic
component market due to excise benefits
Bargaining power of Customers/Buyers
 Bargaining power of customers is high. Demand for
ancillary products
 Bargaining power varies from type of industry
 Buyers have moderate to high bargaining power in the
export market.
Threat of substitutes
Continued..  Organized component players working closely with
R&D teams of OEMs.
 Threat is very low.
 Unorganized components market faces a greater threat
Rivalry among competitors
 Intense competition
 Dereservation of Small scale industries
• Human Resource
- Stipulated code of conduct
- Superannuated plans and bonuses
• Operations
Functional - Product Diversification
Strategies - In-house Development
• Technology
- Use of advanced technology
- Customized power distribution System
• Financials
- Profit for the year 2019-20 was Rs. 1294.44
Crore
Continued.. - Revenue for the year 2019-20 stood at Rs.
63,536.87.
- Consolidated sales fell by 49% Y-o-Y.
• Visiocorp – 2009
Acquisitions • Peguform – 2011
made by • Stoneridge – 2014
MSSL • PKC group PLC – 2017
• MSSL follows diversified and risk free
model.
• Company sets a five- year plan as they rely
on technology.
Strategies • MSSL has gained expertise in integrating
Followed companies from varied cultures.
• Planning is given more importance than
execution.
• Due diligence is done by setting offices in
the foreign countries
• Motherson started as a small silver trading
company and now has presence in 25 countries.
• 85% of their operations have made their way
globally.
• 100% success rate of all their acquisition is the
Conclusion result of in depth analysis and due diligence.
• Acquisition has helped Motherson grow to new
heights.
• Prevailing changes in the automobile industry
can be dealt efficiently through acquisition.
THANKYOU

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