Power Finance Corporation Limited: How to Benefit from Synergies
(5 pages of text)
Case (Pub Mat)
The chairman and managing director of Power Finance Corporation Limited (PFC) acquired REC Limited (REC), which was also engaged in the business of financing power sector projects. Both companies were in the public sector, with the Government of India holding the majority stake. The chairman and managing director must determine the next course of action for the two firms in order to achieve the maximum level of synergy.
The case is best suited for graduate-level courses on mergers and acquisition, corporate restructuring, or investment banking. After working through the case and assignment questions, students will be able to
- identify the possible synergies that drive mergers and acquisitions;
- analyze the effect of a cash deal on an acquirer’s credit rating;
- appreciate the role of independent directors in such deals; and
- evaluate post-integration issues and suggest whether such mergers are reasonable.
India, Medium, 2019
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