When The McGraw-Hill Cos. decided to take a big step into India last year, it soon discovered that things weren’t going to be straightforward. The plan itself was simple enough. McGraw-Hill already owned a stake of just under 10% in CRISIL, India’s biggest credit ratings agency. To win majority ownership, it launched a tender offer, inviting existing shareholders to sell at a premium to the current share price. If enough of them accepted, McGraw-Hill would be able to integrate CRISIL with its own ratings business–Standard & Poor’s–and become the biggest player in the rapidly growing Indian market almost overnight. While simple, executing this plan required some fancy footwork from McGraw-Hill’s treasury and finance team: “It’s very, very complicated to get money into and out of the country,” says John Weisenseel, a senior vice president and the New York-based treasurer for the textbook, publishing and financial information giant.

Indian regulations stipulated that even before anyone knew how successful the bid would be, McGraw-Hill had to guarantee its ability to make good on the offer. This proved to be cumbersome. Putting the money into escrow in the U.S. wasn’t enough–McGraw-Hill had to provide a letter of guarantee from a bank with a branch in India, in addition to a backing guarantee from a bank in the U.S., stating that if there was any kind of hitch, the banks would pony up the full value of the deal. McGraw-Hill has not publicly disclosed the dollar amounts involved, and Weisenseel declines to comment on this issue, but the deal documentation can be found online: McGraw-Hill offered to acquire 3,534,488 (or 55.67%) of the outstanding shares at a cost of 680 rupees each. That put the potential value of the deal anywhere up to $53.8 million (at today’s exchange rates).


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