Financial Performance Analysis of Mergers: A Case of Abbott India - Piramal Healthcare

Doing merger analysis can be a daunting task with endless amounts of work involved in building the model and crunching the numbers. The objective of this paper is to understand the financial performance of the Merger of Abbott India - Piramal Health Care deal. The objective is to look at the consequential analysis of the merger through EPS accretion/dilution, Synergies to break-even, Relative PE's and Ownership Dilution. To achieve the abovementioned objective Back of the Envelope, model was considered to do the analysis. This is an expensive deal if one considers the premium on the market price that Piramal Healthcare has demanded one would get a valuation of approximately 12,000 crores, but it paid approximately 15000 crores to acquire the business, this was majorly attributed to the fact that Abbott India wanted to increase its presence in the Indian Market