Indian companies may be embarking on ever more audacious international megadeals, inspired by aggressive empire-building ambitions rather than by the solid commercial logic and a careful appraisal of investment returns that have characterised past Indian acquisitions abroad.
Just before the 2008 financial crisis made headlines, Indian companies were on a global buying spree. In the fifth part of the series, Dev Chatterjee and Krishna Kant discuss how the crisis came as a black swan event for some, changing the mood from exuberance to despair.
Merger & acquisition and private equity deals struck by Indian Inc in the first half of the current year nosedived by more than half in terms of volume to 216 deals and by 66 per cent value-wise at $7.814 billion over the same period last year.
The current turbulence in world financial markets notwithstanding, there exists a positive attitude among private business owners in emerging economies, particularly in India and China, toward mergers and acquisitions, says a global survey.
Quelling fears of a takeover by Ola, which is also funded by Uber's major investor SoftBank Group, the US-based cab aggregating giant made it clear that the company was not ceding its position in India, one of its core markets.
An interview with BMR partners and media specialists Nitin Atroley and Vivek Gupta
The total number of M&A deals announced till December 15 stood at 445 and its combined value was $30.72 billion, according to global consultancy firm Grant Thornton said. It hardly a match to last year's 676 deals worth $51.11 billion.
India along with Japan and China is among the top five countries in the Asia-Pacific region with the highest number of merger and acquisition deals in the first three months of this year, even as the economic downturn has impacted the overall M&A activity in the region.
Amid the gloomy economic scenario, the $1.8-billion deal in China and the $1.7-billion RIL-RPL deal brought life to merger and acquisition activities in March in Asia, which were dull in the first two months of 2009.
Vodafone case: Questions still remain unanswered and the whole world is eyeing final outcome. The questions remaining unanswered by the high court would have several multinationals on tenterhooks, as the consequences, both for tax payers with similar transactions and perhaps for Indian M&A fortunes may be far reaching.
The downturn in global economy has hit the merger and acquisition transactions as their value so far this year has dropped 35 per cent at $384 billion.
IT solutions provider HCL Technologies has acquired CapitalStream, a US-based lending automation solutions provider, for Rs 158 crore (Rs 1.58 billion) in an all-cash deal.
GTL has set up a special purpose vehicle -- GTL M&A Services -- through which it will provide services like engineering, operation and management, designing and building of network infrastructure. The company would provide remote network managed services from India.
With a market share of 16.6 per cent in mergers and acquisitions and 14.2 per cent in fund raising through the equity route, the investment banking arm of the German financial behemoth has become the numero uno investment bank in the country.
The total value of M&As involving Indian companies surged nearly 63 per cent to $7.8 billion in the first three months of 2016, primarily spurred by big-ticket divestment transactions.
According to sources close to the development, M&M is preparing to sell its 14.04 per cent stake in Swaraj Mazda, it inherited after the acquisition of Punjab Tractors Ltd. While details are being worked out, the sources said, the stake sale could be priced at around Rs 292 per share.
According to a new survey conducted by consultancy major PriceWaterhouseCoopers, about 28 per cent of Indian financial services firms expect to buy stakes in European groups in the next five years and the same percentage intend to enter North America. "Overseas acquisitions by industrial groups such as Tata Steel, Hindalco, Tata Motors and Ranbaxy are clearly proving inspirational," PwC said in its report.
In July, 43 M&A deals were announced with a total announced value of $583.95 million. Out of the 43 deals 17 were domestic, where in both acquirer and target being Indian and 26 were cross-border deals. In the private equity deal segment similar trend was witnessed. The total number of PE deals during the first seven months of 2008 stands at 215, with an announced value of $7.74 billion as against 224 deals amounting to $9.52 billion during the corresponding period in 2007.
PwC wants to know what will happen when a company with substantial reserves is merged into a new concern and the resultant entity is converted into a limited liability partnership.
Bob van Dijk, chief executive officer of Naspers, is now betting on companies in food tech, payments, travel and other consumer sectors to tap the potential of the Indian market.
As is common practice of key parties associated with high-profile M&A deals being referred to by code names, this time around, Reliance has reportedly become 'Rome', MTN is 'Madrid' and Ambani is 'Apollo'.
The total number of M&A deals during the first eight months of this year stood at 346, with an announced value of $22.74 billion as against 456 deals amounting to $48.23 billion in the corresponding period in 2007, according to the data compiled by Grant Thornton. There was an increase in high-value deals in August.
Idea Cellular had recently bought over B K Modi-owned Spice Communications which had operations in Punjab and Karnataka. Asked whether DoT would consider amending some of the norms like three-year lock-in-period for merger at later stage, Behura said 'that stage has not come as yet'.
The July-September quarter saw significant deal momentum.
This would permit the company to provide a wide range of onshore securities underwriting and corporate finance services in the country, Credit Suisse said in a statement.
Indian companies announced as many as 60 private equity deals as against 56 M&A transactions, according to the data compiled by global consultancy firm Grant Thornton. However, the total value of PE deals was lower at $2.05 billion compared to $3.01 billion in M&As transactions.
Sluggish trend in the global and domestic economies seem to have hit the country's deal street with the total value of merger and acquisition transactions so far this year dipping to one third of the volume reported last year.
The billion-dollar tags on recent buys by India Inc only underline the caution with which most companies approach M&As.
Mergers and acquisitions seem to be the flavour of the season in India this year with reports of more than two potential deals hitting headlines every day, but over 80 per cent of these do not actually fructify.
Infosys continues to see challenges in the short-term in the insurance space.
After a detailed scrutiny, fair trade watchdog CCI has suggested Sun Pharma and Ranbaxy to make certain changes in their proposed $4 billion merger deal, including possible divestment of some brands, to address anti-competitive concerns.
Shekhar Bajaj, chairman and managing director of the firm, explains to Viveat Susan Pinto on what led to this sales jump, besides throwing light on the benefits accruing to the sector on account of the GST rate cuts in appliances.
If 2006 was the year when companies in China and India hinted at their potential to redraw the global landscape for mergers and acquisitions, this has been the year when they started to deliver on their promise.
According to data compiled by global consultancy firm Grant Thornton, the volume of M&A deals by Indian companies in countries like Brazil, Scotland, Netherlands and Canada is greater than that in the UK. The value of the nine deals in the UK clinched by Indian firms so far this year stands at just $58.50 million, while India Inc acquired four companies in Canada for a total of $166.70 million, one deal in Scotland for $80 million and another in Brazil for over $33 million.
The stipulation that new front-end stores will have to be set up will impact M&A in the sector.
India has been ranked second in the global M&A deals this year so far in the Asia-Pacific region, with a total outbound deal value of $13.5 billion, a latest report says.
Vodafone CEO Arun Sarin, who engineered the acquisition of Hutch-Essar in India, has accused unsuccessful rival bidders of trying to derail the deal and sought transparency from Indian regulators in M&A approvals.
China and India are Asia's top two targets for merger and acquisitions in the financial services space.
According to a Thomson Financial research, no Indian investment bank figures in the top ten list of the M&A deals that was struck this year, which was topped by UBS.
India ranks second in capital market inflows and fourth in merger and acquisition deals in Asia Pacific (including Japan), as deals worth $65.033 billion were reported in the first eight months of calendar 2007.
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