India: new options for dealmakers
After overturning his predecessor’s decision on the Vodafone case on Wednesday, India’s new Law Minister, Kapil Sibal, has brought about another change that might reassure foreign investors.
Indian companies will now be able to use put and call options in M&A and private equity transactions, adding flexibility and clarity to the deal-making process. Continue reading »
India: foreign M&A deals often go sour as buyers fail to manage takeovers
M&A activity is picking up pace in India. Last year 152 outbound deals were completed, together valued at $15.1bn, according to Dealogic. That’s up from $10.3bn from 193 deals in 2011 – and further growth is expected this coming year.
But a study by KPMG has found that 75 per cent of Indian companies doing foreign deals fail to create value in the first year after completion and 59 per cent of M&A deals actually destroy value. Will Indian groups learn how to implement their deals more effectively – and get a grip on the key challenge – post-deal business integration? Continue reading »
L&T: deals in the works?
Indian markets are buzzing with gossip about Larsen & Toubro (L&T), the Indian conglomerate, over two possible deals.
Although nothing is confirmed, analysts are expecting some deal activity to materialise – and the share price is getting a bumpy ride. Continue reading »
India pharma: Strides Arcolab in $1.6bn deal with US generics maker Mylan
Shares in Strides Arcolab dropped 6.9 per cent on Thursday to Rs917.25, after the Bangalore-based pharmaceuticals company confirmed it is selling off its injectables unit at a lower-than-expected price.
There have been several rumoured buyers for the subsidiary, Agila Specialities, but it was announced on Wednesday that Mylan, the US generic drug producer, is to pay $1.6bn in cash for the business. Continue reading »
Grant Thornton offers guide through minefield of Indian equities
In September, the Indian government announced a spurt of policy initiatives greeted by commentators as a return to the reformist zeal shown in the early days of prime minister Mohamed Singh’s eight years in power. This “big bang”, designed to re-ignite economic growth, was also expected to reawaken interest in Indian equities among foreign investors. But investor interest in some Indian companies actually plateaued after the package was announced, according to new research.
How should equity investors respond? Continue reading »
Hindujas complete $1bn US oil deal
Shares in Gulf Oil, the lubricants business of the Mumbai-based Hinduja Group, rose 2.5 per cent on Friday as the company announced the completion of its $1.05bn acquisition of Houghton Oil, the US industrial fluids manufacturer.
It’s set to be the largest acquisition this year by a non-state Indian company, though it is dwarfed by the proposed $5bn deal made public last month, in which ONGC, the Indian state oil group, is buying a stake in Kazakhstan’s Kashagan oil field. Continue reading »
Indian M&A: not that hungry
When Indian IT company Infosys announced its $350m acquisition of Swiss management consultancy firm Lodestone on Monday, it was proof that the company, struggling against rivals Cognizant and Tata Consultancy Services, was ready to spend some of its $3.7bn cash reserves to help it develop more upmarket products.
But few other Indian companies – cash rich as they might be – have seen fit to do likewise abroad, according to data from Dealogic. Continue reading »
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