STRATEGIC FINANCIAL MANAGEMENT

10 MERGERS AND ACQUISTIONS IN INDIA AND AROUND GLOBE

AKSHAY JAJOO 1011505 V BBA A

Mergers and acquisitions (abbreviated M&A) is an aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location, without creating a subsidiary, other child entity or using a joint venture

Distinction between mergers and acquisitions

The legal concept of a merger (with the resulting corporate mechanics, statutory merger or statutory consolidation, which have nothing to do with the resulting power grab as between the management of the target and the acquirer. When one company takes over another and clearly establishes itself as the new owner, the purchase is called an "acquisition". From a legal point of view, in an acquisition, the target company still exists as an independent legal entity, which is controlled by the acquirer.

1. GVK Power acquires Hancock Coal [IRON AND ORE]

In one of the biggest overseas acquisitions initiated by India in September 2011, Hyderabadbased GVK Power bought out Australias Hancock Coal for about 1.26 billion dollars. The acquisition includes a majority of the coal resources, railway line and port infrastructure of Hancock Coal, along with the option for long term coal supply contracts.

2.iGate acquires majority stake in Patni Computers [IT SECTOR]

In May 2011, IT firm iGate completed its acquisition of its midsized rival Patni Computers for an estimated 1.2 billion dollars. For iGate, the main aim of this acquisition was to increase its revenue, vertical capability and customer base. iGate now holds an approximate stake of 82.5 percent in Patni computers, now called iGate Patni.

3. Essar exits Vodafone [COMMUNICATION]

In March 2011, the Vodafone Group announced that it would buy 33 percent stake in its Indian joint venture for about 5 billion dollars after the Essar Group sold its holding and exited Vodafone. Healthcare giant Piramal Group too, bought about 5.5 percent in the Indian arm of Vodafone for about 640 million dollars. This brings Vodafones current stake to about 75 percent.

4. Mahindra & Mahindra acquires Ssangyong

[AUTOMOBILE]
In March 2011, Mahindra acquired a 70 percent stake in ailing South Korean auto maker Ssangyong Motor Company Limited (SYMC) at a total of 463 million dollars. This acquisition will see the Korean companys flagship SUV models, the Rexton II and the Korando C foray into the Indian market.

5. The Reliance BP deal

[PETROL]
The much talked about Reliance BP deal finally came through in July 2011 after a 5 month wait. Reliance Industries signed a 7.2 billion dollar deal with UK energy giant BP, with 30 percent stake in 21 oil and gas blocks operated in India. Although the Indian governments approval on two oil blocks still remains pending, this still makes it one of the biggest FDI deals to come through in India Inc in 2011-12-31.

6.. The Fortis Healthcare merger [HEALTH CARE]

In September 2011, Indias second largest hospital chain, Fortis Healthcare (India) Ltd, announced that it will merge with Fortis Healthcare International Pte Ltd., the promoters privately held company. This will make Fortis Asias top healthcare provider with the approximate total revenue pegged at Rs. 4,800 crore. Fortis India will buy the entire stake of the Singapore based Fortis International. This company is currently held by the Delhi-based Singh brothers (Malvinder Singh and Shivinder Singh).

7. Essar Energys Stanlow Refinery Deal with Royal Dutch Shell [OIL AND GAS]
The Ruias flagship company for its oil business, Essar Energy completed its 350 million dollar acquisition of the UK based Stanlow Refinery of Shell in August 2011. In addition to a direct access to the UK market, Essar is planning to make optimum utilization of this deal with its 100 day plan to improve operations at the UK unit.

8. Aditya Birla Group to acquire Columbian Chemicals

[CHEMICALS]
In June 2011, the Aditya Birla Group announced its completion of acquiring US based Columbian Chemicals, a 100 year old carbon black maker company for an estimated 875 million dollars. This will make the Aditya Birla Group one of the largest carbon black maker companies in the world, doubling its production capacity instantly.

9. The Vedanta Cairn acquisition [ENERGY]

December 2011 finally saw the completion of the much talked about Vedanta Cairn deal that was in the pipeline for more than 16 months. Touted to be the biggest deal for Indian energy sector, Vedanta acquired Cairn India for a neat 8.6 billion dollars. Although the Home Ministry cleared the deal, it has highlighted areas of concern with 64 legal proceedings against Vedanta.

10.Wipro acquires Yardley business in UK [Consumer Care and Lighting]

Wipro Ltd announced on Tuesday it has signed an agreement with the Lornamead group to acquire the Yardley business in the UK and some other European countries. Wipro Consumer Care and Lighting already owns the Yardley portfolio for Asia, West Asia, North Africa and Australasia, which it bought from Lornamead in December 2009. Wipro will also acquire the Woods of Windsor business, another heritage brand in the UK known for its floral fragrance-led portfolio in the personal care segment. These were followed by big merger and acquisition deals throughout the year in various sectors ranging from finance, banking and insurance to pharmaceuticals and telecommunications. Mergers and acquisitions grew globally in 2006. Two big merger and acquisition deals in the very first two months set the pace for the entire year. ACROSS GLOBE The first was the acquisition of Guidant Corp by Boston Scientific Corporation for $27.2 billion.

The other was the Walt Disney's acquisition of Pixar Animation Studios for $7.4 billion. Some important mergers and acquisitions in 2006 include:

Banca Intesa SpA and Sanpaolo IMI SpA for $37.54 billion

Wachovia Corp. and Golden West Financial in the banking sector worth $26 billion Mittal Steel Co. and Arcelor SA for $22.7 billion Xstrata Plc and Falconbridge Ltd. of mining for $21.2 billion Anadarko Petroleum and Kerr-McGee Corp. in the energy sector for $18 billion Johnson & Johnson Inc. acquired Pfizer Inc. Consumer Products Division for $16.6 billion in the pharmaceuticals sector. Softbank KK acquired Vodafone Japan KK for $15.3 billion in telecommunications Regions Financial Corp. and AmSouth Bancorp for $10 billion in banking and finance. AXA SA and Winterthur in the insurance sector for $9.93 billion Goldcorp Inc. and Glamis Gold Ltd. for $8.6 billion in mining and minerals sector Merrill, Lynch & Co. acquired BlackRock Inc. for $8billion Takeover of Abbey National, Life Insurance Division by Resolution Plc in the insurance sector for $6.7 billion MTN Group Ltd. and Investcom LLC in the telecom sector for $ 5.5 billion in telecommunications