Five Corporate Deals of 2016

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.