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M&A by Indian Multinationals at Foreign Turf valued at US$11.37 billion


Sector wise analysis : International Level

Steel sector was the most dominant in terms of stake sales as the deals valuing $ 3.862 billion took place in Q1 of 2007-08 by the Indian companies in global arena. Tata Steel and Essar Steel account for most of the restructuring activity in this core infrastructure segment.

Indian companies in energy segment made the merger deals to the tune of $3.05 billion. Suzlon Energy purchased 25 per cent stake in Germany based Repower Systems for $1.35 billion. DS Constructions spent $542 million in acquiring Globeleq. Indian Oil Inc and Oil India Ltd together bought out 25 per cent equity stake in Suntera Nigeria OPL 205 Ltd located in Nigeria for $60 million.

Automotives and auto components were the third most vibrant sector on M&A radar. The takeover deals by the Indian auto companies in the global markets were worth $2.28 billion. Sakthi Auto components (SAC) acquired Intermet Europe located in Germany for $129 million. Amtek Auto, Mahindra & Mahindra, Ashok Minda, Tata Autocomp Systems were the other big players in auto space.

Maximum number deals (around 7) took place in pharmaceuticals sector with the valuation of $653 million. The acquisition of Taro Pharmaceuticals by Sun Pharmaceuticals Industries for $454 million was the largest deal in the sector for the first quarter.

Jubilant Organosys paid $122.5 million for Hollister Steir Laboratories in pharma contract research segment. Cadila Healthcare Ltd, Plethico Pharmaceuticals, Zydus Cadilla were other prominent acquirers of foreign firms in the sector.

Retail ($151 million), IT ($66 million) and hospitality ($60 million) were other sectors, which recorded considerable M&A activity by the Indian corporates as part of their global expansion program.

The sectors, which garnered the attention of foreign acquirers in India, were electrical ($487 million), financial services ($225 million), cement ($129 million), shipyard ($100 million) and auto ($97.5 million).

Among the domestic mergers and acquisitions, iron ore sector recorded highest valuation for the acquisition deal of 51 per cent stake in Sesa Goa by Vedanta Resources for $981 million.

Visiting the phase of consolidation, the aviation sector registered three merger deals cumulating $637 million all in first quarter of current fiscal. The biggest acquisition was of Air Sahara by Jet Airways, which finally completed the takeover this quarter at $353.6 million. Kingfisher Airlines acquired 26 per cent preferential equity stake in Air Deccan at the cost of $134 million. The third merger was of GoAir with Paramount Airways at the value of $150 million.

The estimated deals cost in steel sector was $294 million. BPO sector recorded tbuy-out Intelenet Global Services by SKR BPO Services for $200 million. Genpact acquired Axis Risk Consulting for an undisclosed amount.

In auto segment, Mahindra & Mahindra undertook the 31 per cent stake acquisition in Swaraj Mazda for $154 million. Food and beverages ($158 million) and financial services ($121 million) were other few vibrant sectors actively involved in consolidation activity.

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