According to multinational law firm Baker McKenzie, India will experience M&A deals of over USD 52 billion in 2019 since M&As are expected to remain stable despite global headwinds.
Experts see M&A activity to remain steady in 2020 due to the government’s disinvestment process and resolutions under the Insolvency and Bankruptcy Code, such as Essar Steel and others.
With this, we would be able to experience several trends to promote M&A activities with corporations seeking to appease activist investors, and private entities to cash in on the returns achieved.
At the same time, there are high levels of liquidity and low-rate interests, boosting buy-side activities. There are even industries moving towards digitization, and new business models that are driving M&A enabled transformations.
As we get ready to turn the page on yet another year, let’s recall on some of the most significant M&As of 2019.
Do you know that Reliance Industrial Investments and Holdings Limited (RIIHL) has entered into a binding agreement with Brookfield Infrastructure Partners LP for Rs 25,215 crore?
Head down to know more about this agreement.
Brookfield Infrastructure Partners and Reliance Industries
Canadian asset management, Brookfield Infrastructure Partners has decided to join hands with Reliance Industries after investing Rs 25,215 crore in the telecom asset by Mukesh Ambani’s Reliance Industries. The acquisition will own 100% of the issued and paid-up equity share capital of Reliance Jio Infratel Private Limited (RJIPL).
RIL is pleased to enter into this relationship with Brookfield and is confident of its partner’s abilities to manage a large portfolio of high-quality infrastructure assets and enhancing value creation opportunities.
RIL Chief Financial Officer V Srikanth said, “Brookfield is bringing in Rs 25,215 crore and will own 100% of the tower company. The proceeds from the investment will be used to repay existing financial liabilities of the tower business.”
Acquisition of Europe’s @Leisure Group by OYO Rooms
The big news is that OYO Rooms have flexed their acquisition muscles and bought @Leisure Group for a whopping €360 million. The acquisition marked the first giant International investment by India-based OYO, who has put its feet in the European market. There are high hopes with this deal looking at the trend of booking an entire home for vacation in Europe and India.
Acquisition of Bhushan Energy Ltd (BEL) by Tata Steel
Tata Steel acquired Bhushan Energy Ltd for ₹800 crores under the Corporate Insolvency Resolution Plan. Tata holds 99.99% of the total equity share capital of BEL. Bhushan Energy, a subsidiary of BEL was also taken over by Tata Steel in May 2018 and renamed as Tata Steel BSL Ltd.
The merger of Indiabulls Housing Finance Limited (IBHFL) and Indiabulls Commercial Credit Limited (ICCL) into Lakshmi Vilas Bank Limited (LVB)
This year CCI ( Competition Commission of India) gave green signal to the merger of Indiabulls Housing Finance Limited (IBHFL) and Indiabulls Commercial Credit Limited (ICCL) into Lakshmi Vilas Bank Limited (LVB) and to operate under the business name of Indiabulls Lakshmi Vilas Bank Limited. LVB is working as a commercial bank offering banking and ancillary financial services.
Dena Bank and Vijaya Bank merge with Bank of Baroda (BoB)
With a total business of ₹15 trillion, the Bank of Baroda has beaten private sector ICICI Bank to become India’s third-largest bank after merging with Vijaya Bank and Dena Bank.
It’s India’s first-ever three-way consolidation of banks in India, emerging as the country’s second-largest public sector bank. With this, BoB will likely create a globally competitive bank, if you take into account the economies of scale, low-cost deposits, synergies for the network, subsidiaries, etc. The merger looks forward to improve customer base, market reach, operational efficiency and likewise.
The country’s M&A remains to be resilient despite the global economic turmoil. Domestic consolidation continues to be the driving force to India’s M&A activity, including business-friendly reforms and high consumption growth, will help to attract local and foreign investors.
Rakesh Narula & Co. (RNC) has carried out valuations for numerous cross border transactions across the globe including Africa, America, South East Asia & Middle East. We are a leading valuation advisor with expertise in the areas of valuation of fixed and current assets for M&A, bank lending, insolvency, financial reporting, statutory compliances etc. Visit us for all your queries!
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