Havells India
Problem Analysis and Decision Making
Havells India acquired Sylvania Lighting Inc. This acquisition was a good strategic acquisition for Havells India. This made sense because of the fact that Havells was looking to expand its market. Havells prior to the acquisition only had entrance into the Southern and Eastern markets. After the acquisition of Sylvania they will have acquired an international business division and certifications. This includes over 45 different countries including Europe, Middle East and Africa. With the acquisition Havells also receives another business firm which is the lighting business. The products include primary lighting and lighting fixtures. These products are fully developed and have a wide range since 2006. This acquisition would be manageable if both sides are willing to cooperate and work together. With any acquisition come potential risks. These risks include Financial, Diversification, Cultural, Management, and Knowledge. Each risk requires individual attention and should be looked at and considered. When one has risks they should be weighed in order to determine whether the decision will prove profitable.
The first risk is financial risks. The acquisition of Sylvania would cost over $200 Million. This would be a hard financial risk to overcome. Dealings with banks, such as Duetsche Bank, would always be a difficult situation. This then leads to interest as well as dependability on the money loaned. Loaned money is difficult because the money in which needs to be paid back to these banks. If Sylvania fails or does not make the profits wanted from Havells, this will make it hard for Havells to pay back the money loaned to banks. The next issue is when you acquire a company you acquire the debt and everything associated with it. Sylvania is considered to have a high debt ratio. The next risk to look at would be the diversification risks. This would include the products offered by the new companies.
Havells India acquired Sylvania Lighting Inc. This acquisition was a good strategic acquisition for Havells India. This made sense because of the fact that Havells was looking to expand its market. Havells prior to the acquisition only had entrance into the Southern and Eastern markets. After the acquisition of Sylvania they will have acquired an international business division and certifications. This includes over 45 different countries including Europe, Middle East and Africa. With the acquisition Havells also receives another business firm which is the lighting business. The products include primary lighting and lighting fixtures. These products are fully developed and have a wide range since 2006. This acquisition would be manageable if both sides are willing to cooperate and work together. With any acquisition come potential risks. These risks include Financial, Diversification, Cultural, Management, and Knowledge. Each risk requires individual attention and should be looked at and considered. When one has risks they should be weighed in order to determine whether the decision will prove profitable.
The first risk is financial risks. The acquisition of Sylvania would cost over $200 Million. This would be a hard financial risk to overcome. Dealings with banks, such as Duetsche Bank, would always be a difficult situation. This then leads to interest as well as dependability on the money loaned. Loaned money is difficult because the money in which needs to be paid back to these banks. If Sylvania fails or does not make the profits wanted from Havells, this will make it hard for Havells to pay back the money loaned to banks. The next issue is when you acquire a company you acquire the debt and everything associated with it. Sylvania is considered to have a high debt ratio. The next risk to look at would be the diversification risks. This would include the products offered by the new companies.