Mergers and Acquisitions promote
growth and diversification in new markets. This growth is earned by acquiring a
share of an existing player and venturing into a market which is new for the
buyer. The year 2016 saw several M&A deals in different sectors, signaling India
Inc. moves to stay afloat in a yet to revive market.
Myntra – Jabong
Myntra, an online fashion app which
was acquired by Flipkart in 2014, acquired Jabong for a whopping $70 Million. The
all-cash deal was only sealed after Global Fashion Group decided that Jabong
had to tie up with a local player to succeed. Jabong has managed to minimize losses
after reducing discounts.
HDFC Life – Max Life Merger
Under the three-step merger
process. Max Life will first combine with its parent Max Financial Services
Ltd. In the next stage, the insurance unit will be demerged from this entity
into HDFC Life. Finally, the non-insurance businesses of Max Financial will
merge into group company Max India Ltd. The valuation of the merged life
insurance entity will be around Rs 65,000 crore and will be called HDFC Life.
Reliance Communications – Aircel
In the biggest consolidation deal
in the telecom sector, Reliance Communications Ltd has agreed to merge its
mobile phone services business with smaller rival Aircel to create Rs 65,000
crore entity. The RCom-Aircel combination will create a telecom operator ranked
fourth by customer base and revenues. It will be No. 3 operator by revenues in
12 important circles. RCom will turn its wireless business into a special
purpose vehicle in a slump sale, excluding the tower and overseas arms of the
Ambani Company.
Quikr – CommonFloor
Quikr announced acquisition of the
property search website for $200-million in an all-stock deal. The deal will
give CommonFloor access to the online-classifieds firm's vast customer base.
CommonFloor, which has built a robust technology platform for home hunters, was
unable to raise fund or monetize its business model. The deal stitched by Tiger
Global, main investor in both Quikr and CommonFloor, becomes the first major
consolidation story in 2016.
Blackstone – Mphasis
World's largest alternate asset
manager, Blackstone Group acquires controlling 60.5 per cent stake in IT
services firm Mphasis from Hewlett-Packard Enterprise. With $1-billion Mphasis
buy, Blackstone makes its boldest bet in India. The all-cash deal reinforces
the bulge-bracket investment firm's bullish outlook on the outsourcing business
as more and more global client’s ship out IT jobs to emerging markets such as
India and save costs. Following the acquisition, Mphasis will potentially get
access to Blackstone entire PE portfolio of over 80 companies across the world
for future outsourcing and technology contracts.
No comments:
Post a Comment