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Airline Merger: Kingfisher & Deccan

Kingfisher Airlines acquired a majority stake in Air Deccan in a two-phase deal. In the first phase, Kingfisher purchased 26% of Air Deccan shares for 550 crores. In the second phase, Kingfisher made an open offer to purchase an additional 20% stake for 418 crores. After the acquisition, Air Deccan was renamed as Kingfisher Airlines and the merger created the largest domestic airline in India, allowing Kingfisher to operate both low-cost and regular service brands and adding new international routes. The synergies from the merger were expected to result in cost cuts of up to 300 crores annually in addition to increased market share.

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Ajit Shinde
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568 views20 pages

Airline Merger: Kingfisher & Deccan

Kingfisher Airlines acquired a majority stake in Air Deccan in a two-phase deal. In the first phase, Kingfisher purchased 26% of Air Deccan shares for 550 crores. In the second phase, Kingfisher made an open offer to purchase an additional 20% stake for 418 crores. After the acquisition, Air Deccan was renamed as Kingfisher Airlines and the merger created the largest domestic airline in India, allowing Kingfisher to operate both low-cost and regular service brands and adding new international routes. The synergies from the merger were expected to result in cost cuts of up to 300 crores annually in addition to increased market share.

Uploaded by

Ajit Shinde
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd

MERGER & ACQUISITION

KINGFISHER AIRLINES & AIR DECCAN

Presented

By Ajit Mangarulkar Rahul Tayade Atit Sukhe

24 43 41

KINGFISHER AIRLINES

INTRODUCTION

Operations started 9 May 2005. Registered Office UB Towers, BLore.

Head Office Kingfisher House, Mumbai.

CONT,

United Breweries Holdings Limited (UBH), is the parent company of Kingfisher Airlines (Kingfisher). Chairman Dr. Vijay Mallya.

CONT..,
First

flight from Mumbai to Delhi. First international flight from Blore to London on, 3 September 2008. First Indian flight to have IN-FLIGHT ENTERTAINMENT (IFE) system. Welcome kit. Pen, Facial tissue, & headphones. Live TV. On screen Safety Demonstration.

DESTINATION

Domestic 65.
International 7 across Asia & Europe

AIR DECCAN

INTRODUCTION

Started by Cap., G R Gopinath.

First flight on, 23 August Hyderabad to Vijaywada.

2003 from

CONT..,

Common Mans Airline. Tag Line Simpli-Fly. First Indian airline to fly to second tier cities like Mangalore, Madurai and Vishakapatnam from Metropolitan areas like Blore and Chennai.

Vision: To empower every Indian to fly


MISSION:To

demystify air travel in India by providing reliable low cost and safe travel to the comman man

INTRODUCTION

On 31 May 2007 UBH(kingfisher) acquired 26% stake of Air Deccan. Kingfisher paid 5.5billion to acquire the stake. Additional 20% stake.

DEAL STRUCTURE

1st Phase: UB bought 26% stake at Rs.155 p.s. on 9th July,2007 Paid Rs.550crores

2nd Phase: Open offer for additional 20% stake Additional Rs.418crores

CONT..,

Air Deccan renamed as Kingfisher Airlines. New CEO and Chairman Vijay Mallya.

Vice chairman G R Gopinath.

CONT..,
The

merger will create the largest player in the domestic aviation market. The new firm will operate two separate brands Deccan and Kingfisher. From August 2008, the merged firm will have a right to fly overseas. Deccan will fly to West Asian countries, while, Kingfisher's target will be to touch down at San Francisco and New York from Bangalore.

SYNERGIES
Operational

Synergy in the form of cost cutting(upto Rs.300crs.) Increasing market share(32-34%) Have both direct and indirect connectivity to the US, Europe and different Asian regions

SYNERGIES
Received

in writing slots to operate flights in San Francisco, JFK (New York) and Heathrow (London) These destinations will be connected nonstop from Bangalore, unique routes from India Also applied for Mumbai-Hong Kong, Mumbai-London and Delhi-Kathmandu routes.

CONCLUSION
The

Industry has Witnessed tremendous growth in the Past Decades Leading to intense Competition in the Industry & Setting the Stage for Consolidation

THANK YOU

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