India - Merger & Acquisition News

[IndiansUnite]

With so many Indian companies buying out foreign companies and others merging with others, a thread to track them was always needed. This thread will serve that very purpose.

[IndiansUnite]

Some recent deals and news on prospective deals -

Apr 11: JK Tyres acquires Mexican firm Tornel

NEW DELHI: JK Tyres and Industries on Friday said it has acquired Mexican tyre company Tornel for Rs 270 crore.

The acquisition, which would be for 100 per cent shareholding in the company, is being done through special purpose vehicle route and the buyout is expected to close by May-end this year.

"This acquisition extends our global reach and is also a strategic fit for JK Tyres as we are already the largest exporter to the North and the South American markets," Mr Hari Shankar Singhania, Chairman, JK Tyres and Industries said here.

Tornel has three operating tyre plants with a capacity of 6.6 million tyres and manufactures entire range of bias and radial tyres, including tyres for commercial vehicles and high-speed passenger cars.

Apr 14: Biocon to buy US firm for $400 mn: Report

MUMBAI: India's top biotechnology firm, Biocon Ltd, is in talks to acquire a US firm in a deal valued at $400 million to boost its overseas pharmaceutical distribution network, a newspaper reported on Monday.

A spokeswoman for the Bangalore-based Biocon declined to comment, the newspaper said. Biocon which makes insulin, cholestrol-lowering statins and other branded drugs bought 70 percent of German marketing firm Axicorp GmbH for 30 million euros ($47 million) in February to boost its distribution network in Europe.

Apr11: Tata makes offer to acquire Brazilian ore miner AVG

NEW DELHI: After a spectacular takeover of Corus, Tata Steel has made a hostile offer to acquire Brazilian iron ore miner AVG, which is owned by global mineral giant MMX.

The Steel Business Briefing (SBB) quoted a MMX President Eike Batista as saying that the domestic steel giant has made the offer.

"Eike, however, did not reveal the value offered by Tata, but said a deal could be made if Tata guarantees it will build a carmaker on the outskirts of Acu Port, the complex MMX is building on the coast of Rio de Janeiro," it quoted the daily as saying.

However, when contacted a Tata Steel spokesman could not confirm the same.

AVG was purchased by MMX last year for 224 million dollars. Its current capacity is around 2.3 million tonnes per year, but MMX has already announced plans to integrate this asset into its recently acquired Minerminal mineral company and expand the combined output to 6.1 million tonnes this year and upto 10 MT by 2010, it added.

[IndiansUnite]

Apr18: GMR to acquire 50% of SA coal firm for Rs 620 cr

GMR Infrastructure, the Bangalore-based infrastructure firm, is expected to pay around Rs 620 crore by September 2008 to acquire 50 per cent stake in a coal mining firm in South Africa.

Apr18: SIRO buys out German clinical R&D firm

SIRO Clinpharm (SIRO), one of India’s leading clinical research organisations (CRO), has signed an agreement to acquire Germany-based Omega Mediation Group, a leading mid-sized European CRO, for an undisclosed amount in an all-cash deal.

The acquisition will provide SIRO with operational capabilities in Germany, Greece, Estonia, the Baltic states and Israel, besides access to Omega’s major European pharmaceutical and biotech clients.

Omega will continue to function independently and the promoters and the current management will continue, said Chetan Tamhankar, chief operating officer of SIRO Clinpharm, at a press meet in Mumbai today.

“The combined entities of SIRO and Omega will have a turnover of over Rs 200 crore,” said Tamhankar.

The Indian firm was also looking at acquisitions or greenfield projects in the emerging CRO markets of southeast Asian such as Malaysia, the Philippines and Thailand, he added.

Apr21: M&M set to buy Belgian gear-maker for $475 mn

MUMBAI: Auto major Mahindra & Mahindra (M&M) is understood to be in an advanced stage of negotiation to acquire Belgium gear-maker VCST. The deal size could be in the range of around euro 300 million ($475 million or Rs 1,900 cr), sources said.

The Indian auto major is doing a negotiated deal with the company. When contacted, Hemant Luthra, president of the automotive component division of M&M, Mahindra Systech, refused to comment.

The deal will be part of M&M’s strategy to increase its footprint and share of the gear market, particularly in Europe. The company, through its component arm Systech, is working on the European acquisition and strategic partnership simultaneously to take its share of the gear market in Europe to around 40% and business worth Rs 2,500 crore.

[IndiansUnite]

Satyam buys Caterpillar consultancy arm for $60 mn, Belgian S&V Management Consultants for $35.5mn

Mumbai: Satyam Computer Services Ltd has acquired construction equipment maker Caterpillar Inc's market research and customer analytics operations for $60 million in an all-cash deal, the company said in a statement.

The acquisition would support Caterpillar in segmentation, promotions, forecasting, product development and customer survey execution, Satyam's manufacturing and automotive group director and senior vice president Subu D Subramanian said.
...
..
The software services firm has also acquired Belgium-based S&V Management Consultants, a supply-chain management firm that serves clients in the manufacturing and pharmaceutical industries, for $35.5 million in an all-cash deal.

[mhp]

fantastic thread!! much needed.. and great updates. Thanks!!

[phaedrus]

RCom buys UK WiMAX operator eWave World

Reliance Communications (RCom) has acquired UK-based eWave World, which offers wireless telephony services using WiMAX technology, for an undisclosed amount. The acquisition was made through RCom’s subsidiary for global operations, Reliance Globalcom . It will be funded through internal accruals, Reliance Globalcom CEO Punit Garg told reporters in Mumbai on Thursday.
“We have taken a gigantic step in the broadband direction and looked at 4G WiMAX to be the next step in our global aspirations,” he said. WiMAX refers to high-speed internet access over a wireless connection. It is often called a fourth generation (4G) technology, an improvement over the third generation (3G) services. The main thrust of 4G technologies is to provide high-speed, high-bandwidth, packetised data communications.
Reliance Globalcom would invest about $500 million (Rs 2,000 crore) over the next few years to build and acquire WiMAX networks in emerging markets in different continents. The networks would be capable of offering fully mobile voice and data services with download speeds as high as 2 MB.
eWave holds WiMAX licences and has received spectrum to commence services in several countries. The acquisition will help RCom gain access to airwaves and licences to operate the WiMAX services in several countries, including China, he said.
“4G WiMAX networks in 50 countries would enable us to offer services to over 75% of global population in combination with Reliance Globalcom’s 1,15,000 km IP (internet protocol) enabled network spread across six continents,” Mr Garg said.
The commercial launch of the WiMAX services would begin by this year-end and by 2009-end, the company aims to roll out its network in close to 20 countries.
This is the second overseas investment by Reliance ADA Group in WiMAX technology. Reliance Technology Ventures (RTVL), a subsidiary of RCom, picked up a stake in French WiMAX chip maker Sequans late last year.
eWave World also has a JV in China, under which the company co-owns and operates 36,000 km of optic fibre across top 30 cities in China. This JV firm has applied for a nationwide broadband licence in China.

source economictimes epaper

[phaedrus]

India most targeted PE investment destination in Asia

Merger and acquisition deals by private equity investors in the country have soared to a record $2.1 billion so far this year, making India the most targeted nation for such agreements in Asia, says a report.
Private equity mergers and acquisition volumes targeted towards India have grown to 2.1 billion dollars through 52 deals in 2008 so far compared to $893 million in the year-ago period, according to global financial data provider Dealogic.
“India is the most targeted nation in Asia (excluding Japan) for financial sponsor M&A buyouts in 2008 year-to-date, accounting for 36% of the buyouts in the region, followed by China (28%) and South Korea (21%)” the report stated.
Buyouts by private equity investors this year account for 15% of the total M&A deals in the country. This has increased four per cent from the same period last year.
The most significant PE deal in the country has been the $324 million buyout of 14% stake in Akruti City by Citi Venture Capital International and American International Group this year.
PE investments constitute 8% of the total global M&A volumes, while they account for 6% of the deals in the US so far this year.
The average size of the PE deals in 2008 so far has been $49 million dollars, against $27 million dollars last year.

source livemint.com

[IndiansUnite]

M&M eyeing stake in Italian firm Stile Bertone

MUMBAI: Mahindra & Mahindra has set sights on Italian automotive style company, Stile Bertone — famed for designing iconic models like the Alfa Romeo, Lamborghini, Aston Martin and Ferrari. The Turin-based car designing and contract manufacturer has been up for sale ever since Nuccio Bertone, son of founder-promoter Giovanni Bertone, passed away in February 1997.

The Mahindra group, which developed close business ties with the Bertone group after the Italian company designed some of its utility vehicles, is learnt to be talking to the Bertone family to explore options of buying an equity stake.
...
While it’s too early to peg a value on the size of a possible acquisition, the unlisted Italian company is estimated to post a revenue of E39.1 million in 2008. A deal with the Bertone family will give Mahindras access to high-tech design and also help the Indian auto company in its plans to build a global R&D centre.

Tatas to buy stake in Italian auto designer Pininfarina

Italian auto designer and contract vehicle manufacturer Carozzeria Pininfarina today said that the Tata's have expressed an interest in participating in the company's planned capital increase to finance its forthcoming operations.

The company plans to introduce a range of luxury electric vehicles in 2010 covering virtually every segment and plans to raise up to €100 million in mid 2008

Bharti Airtel eyes South African MTN

Bharti Airtel is learnt to be considering a bid for South African telecom firm MTN, which has operations in over 20 countries. If successful, it will catapult the company into the league of top global telecom players.

[Euromast]

Rolex Rings to buy LatAm forgings co

AHMEDABAD: Rajkot-based Rolex Rings (RRPL), a supplier of forged and rolled rings to global brands such as FAG Bearing and SKF Bearings, is all set to buy out a Latin American forgings company for Rs 150 crore. Rolex has confirmed it has carried out a due diligence of the target company and the deal is likely to be completed in a month.

The acquisition will give the Rs 300-crore rings manufacturer access to new markets, said Manesh Madeka, managing director, RRPL. “We want to expand our presence in Latin America and nearby markets in the US, through this acquisition,” he said.

Rolex plans to raise Rs 100 crore through private equity, while a minor investment would be supplemented by debts route. RRPL had raised Rs 160 crore by divesting 26% to a US-based PE firm New Silk Route, to fund its expansion plans.

M&A expected in ports: Ernst & Young

Ports are increasingly attracting the interest of investors. The merger and acquisitions trend in port have hit India, too," Ernst and Young said in a study.

Mature ports such as Hong Kong, Singapore or Los Angeles provide a steady income stream while ports in the emerging markets of China, India and Eastern Europe have strong potential for growth," it pointed out

In 2007, PE firm Global Infrastructure Partners bought 25 per cent stake in Chennai Container Terminal, which is the leading container terminal on the country's east coast and second largest private container terminal in India overall by traffic volume.


In 2008, PSA acquired a 49 per cent stake in ABG Kandla Container Terminal from Mumbai-based ABG Infralogistics. The Kandla terminal handles 1.65 lakh twenty-foot equivalent units last year.


PSA had purchased a 49 per cent stake in ABG Kolkata Container Terminal for Rs 50 crore

[ajay_ijn]

Berger Paints bags Polish firm Bolix for $38 million
http://economictimes.indiatimes.com/...ow/2997111.cms
KOLKATA: Berger Paints India on Tuesday acquired Polish firm Bolix SA, a leading provider of external insulation finishing system (EIFS) in the B2B segment, for a net purchase price of $38.6 million (around Rs 1,54.7 crore). The Kolkata-based paints major acquired the entire bloc in the Polish firm held by global private equity group Advent International.

The holding was bought by Berger Paints’ wholly-owned Cyprus subsidiary, the company’s media statement stated. While Ernst & Young and Tomczak & Partners of Poland assisted Berger Paints clinch the deal, Clifford Chance and CAG were advisors to Advent International.

Elaborating on the acquisition, Berger Paints managing director Subir Bose told ET: “With the European Union and other European countries focusing on energy saving and global warming, EIFS offers tremendous growth potential. Given the high cost of fuel, the world at large, including India, will have to adopt this green technology in the near future as it helps save energy. This apart, the technology and the product complements Berger’s existing business.”

The purchase is conditional and depends on the fulfilment of certain conditions, including clearance by the Polish Anti-Monopoly Office. The purchase price is also subject to the usual adjustments at the time of completion of the transaction.

External insulation finishing system is a comprehensive solution which helps meet the insulation and decorative requirements of a building’s external walls. Bolix is the largest provider of EIFS in the B2B segment in Poland. The company also exports to neighbouring countries like Ukraine, Russia and the Baltic states with an annual turnover exceeding $45.5 million in 2007.


Dubai Group acquires 40% stake in India’s Chiranjjeevi Wind Energy
http://www.albawaba.com/en/countries/UAE/226409
Dubai Group, the leading diversified financial services company of Dubai Holding, today announced that it has acquired a 40 per cent stake in India’s Chiranjjeevi Wind Energy Limited (CWEL), a wind turbine manufacturer in India. The investment, which was made by Dubai Ventures, the equity investment company of Dubai Investment Group, a subsidiary of Dubai Group.



Dubai Investment Group, which aims to build a diversified portfolio of assets in renewable energy, has made focused investments, through its subsidiary Dubai Ventures, over the past two years in the renewable energy sector across Asia, with exposure in direct renewable energy sources and upstream producers of raw material used in renewable energy.



Abdulhakeem Kamkar, Chief Executive Officer of Dubai Investment Group, said: “We are pleased to partner with India’s CWEL as part of our continuous commitment to finding solutions towards a better future. The world we live in is greatly impacted by global warming and we believe endorsing a project on renewable energy alternatives is the step in the right direction for mitigating environmental degradation.”



“While CWEL will have a strong base in India, we intend to explore,along with CWEL, other regions specially Middle East and Africa, where there is potential to set up wind farms”.



CWEL has recently signed a memorandum of understanding with two German companies - Frisia GmbH for acquiring the entire design, technology, intellectual property of 850KW wind turbines, and EUROS for transfer of technology to manufacture rotor blades. CWEL has already installed over 150 wind-turbine machines in India.



R.V.S Marimuthu, Chairman and Managing Director of Chiranjjeevi Wind Energy, said: “We are overwhelmed by the interest of Dubai Investment Group, which acknowledges our company’s unique strengths. This has enabled us to create a platform for organic growth initiatives and compete globally.”



CWEL recently received a US$25 million order from India Globalization Capital, Inc. for setting up a 24MW wind farm in Karnataka, India. The company will operate and maintain the wind energy farm, which is expected to be operational within a year. CWEL has also been mandated to set up wind farms for generating up to 260MW by Karnataka Thermal Power Corporation Ltd (KTPCL), a Government of Karnataka undertaking.

Dr. Reddy's Acquires BASF's Pharmaceutical Contract Manufacturing Business and Related Facility at Shreveport in the US
http://www.businesswire.com/portal/s...03&newsLang=en
HYDERABAD, India--(BUSINESS WIRE)--Dr. Reddy’s Laboratories (NYSE:RDY) announced today that it has signed a definitive agreement to acquire BASF’s pharmaceutical contract manufacturing business and related facility in Shreveport, Louisiana, USA. This transaction is subject to customary closing conditions, and is expected to be completed within the first quarter of fiscal year 2008-09. The transaction will be funded using Dr. Reddy’s internal cash reserves or other committed credit facilities. Further financial terms and conditions of the transaction will not be disclosed.

This business involves the contract manufacturing of generic prescription and over-the-counter products for branded and generic companies in the US. It recorded revenues of US$43 million for the year ended December 31, 2007.

The acquisition will include the relevant business, customer contracts, related ANDAs and NDAs, trademarks, as well as the manufacturing facility and assets at Shreveport, Louisiana. It also includes a tolling and supply agreement. The facility is designed to manufacture solid, semi-solid and liquid dosage forms. It currently employs approximately 150 people and has a proven track record of compliance with regulatory authorities including the USFDA.

Satish Reddy, Managing Director & Chief Operating Officer, Dr. Reddy's Laboratories, said, “Dr. Reddy’s is committed to building a leading Global Generics business over the next few years. And as we drive significant growth in our key markets, we will continue to expand our supply chain network into these markets to enable us to respond to local market needs as well as provide competitive solutions to our customers globally. The acquisition of BASF’s finished dosage manufacturing facility in the US will enable us to strengthen our supply chain for North America and provide a strong platform for pursuing additional growth opportunities.”

Essar acquires US based mobile payment company, Obopay Inc
http://economictimes.indiatimes.com/...ow/2992108.cms
NEW DELHI: Essar has acquired a strategic stake in Obopay Inc, a US-based mobile payment company, for an undisclosed amount.

Obopay is a leading player in the US for payments via mobile phones. It recently announced closing of its fourth round of venture funding, raising 20 million dollars.

The stake has been acquired by Essar Communications Holdings Ltd, the telecom subsidiary of Essar Global Ltd.

"Obopay has introduced significant mobile payment innovations in the US and recently in India as well. We look forward to working with Obopay to build upon the integration of the mobile phone into the lives of consumers worldwide," Essar Senior Vice-President (Business Development) K B Rajendran said in a statement.

UAEs Etisalat eyes Stake in Spice Telecom
http://economictimes.indiatimes.com/...ow/2996913.cms
NEW DELHI: UAE’s Emirates Telecommunications Corp (Etisalat) on Tuesday said that it would spend up to $4 billion (Rs 16,000 crore) to acquire a licence or buyout an Indian telco, while also adding that Spice Telecom was amongst the possibilities. “Our aim is to buy into an operator that covers most of India, and Spice is one possibility,” Mohammed Omran, chairman of the Arab world’s second-biggest telecoms firm, told international media in Abu Dhabi on Tuesday. “The market value for shares (in India) have gone down a little so it’s a good time for us to consider entry,” Mr Omran told Reuters.

The report also adds that Etisalat, during this month, was in talks with several Indian companies including Spice, but had not finalised any deal so far. Spice apart, the UAE-based telecom major is also in talks to pick up stake in Videocon-owned Datacom and realty major Unitech, both of whom were awarded telecom licenses recently. Etisalat, which has operations in 16 countries and 51 million customers, has spend over $5 billion over the last four years to acquire mobile operators in Egypt and Saudi Arabia. Besides, the company had recently announced that it was picking up a 16.5% stake in Pakistan-based telco PT Excelcomindo Pratama.


3i Infotech buys US co Regulus for $80 mn
http://economictimes.indiatimes.com/...ow/2996904.cms
MUMBAI: IT software and services provider 3i Infotech on Tuesday said it has acquired Regulus Group, a US-based payment and document processing company, for nearly $100 million, in a move that would increase the Indian company’s overseas presence, besides increasing its revenue. The cost of the acquisition is approximately $80 million, with an additional $20 million based on earn-outs linked to its performance in the next two years.

The acquisition is an all-cash deal, funded by debts raised on Regulus and guaranteed by 3i Infotech, to be serviced over a period of seven years, the company said. The company plans to close the deal within three months. “We expect revenue from Regulus to start accruing to us by the end of second quarter this year,” 3i Infotech managing director and CEO V Srinivasan told ET. Regulus had reported $148 million in revenue for the year-ended December, 2007.

Commenting on the synergies behind the buyout, Mr Srinivasan said: “This acquisition would help us increase our footprint in the payment processing industry both in the US and in emerging markets like India and China. It also allows us with cross-selling opportunities to Regulus’ BFSI (banking financial services and insurance) clientele.” Currently, the BFSI space accounts for 48% of Regulus’ total clients. 3i Infotech currently earns $130-140 million in revenue from its US businesses, said 3i Infotech CFO Amar Chintopanth.

Fresenius SE acquires 73 per cent stake in Daburs Pharma Unit for 219 million USD
April 20
http://news.monstersandcritics.com/b...f_Indias_Dabur
New Delhi - Germany's Fresenius SE acquired a 73-per-cent stake in India's largest anti-cancer drugmaker Dabur Pharma for 219 million dollars, news reports said Sunday.

The German firm bought the stake through its Singapore subsidiary Fresenius Kabi Pte at 76.27 rupees (1.91 dollars) per share, a 10.2 per cent premium over Dabur Pharma current share price on the Bombay Stock Exchange, the Economic Times Daily reported.

In a filing to the exchange, Dabur said promoters and other shareholders of the company had executed share purchase agreements with Fresenius Kabi Pte.

The acquisition would be subject to certain conditions including necessary regulatory approvals and compliance by Fresenius with public offer requirements under the SEBI regulations, it added.

Dabur Pharma is an associate company of the Dabur group which recorded a turnover of 420 million dollars in 2006. The firm sold its non-oncology drugs' business to local rival Alembic last year to focus on cancer-treatment medicines.

[ajay_ijn]

Essar acquires US Steel Firm Esmark for 778 million USD
Essar Steel, the Indian steel producer, is to buy American steel firm Esmark, in a $778m (£392m) deal which includes a $110m long-term loan.

Esmark accepted a cash purchase price of $17 per share, a 13.5% premium on Tuesday's closing share price.

Esmark chief executive James Bouchard said it needed a strategic partner as raw material and transport costs rose.

The global market for steel has been growing, with strong demand from developing countries such as China.

Last year, Essar bought Minnesota Steel for an undisclosed sum, only days after it also agreed to acquire Canadian firm Algoma Steel for $1.6bn.

[Euromast]

Dr Reddy's buys BASF's pharma contract biz

MUMBAI: Dr Reddy’s Laboratories (DRL) on Wednesday said it will acquire US-based BASF’s pharmaceutical contract business and its manufacturing facility for an undisclosed amount.

BASF’s business, which would be transferred to DRL, includes contract manufacturing of generic prescription and over-the-counter products for branded and generic companies in the United States, DRL said in a filing to BSE.

[harsh1802]

Originally Posted by ajay_ijn

Essar acquires US Steel Firm Esmark for 778 million USD
Essar Steel, the Indian steel producer, is to buy American steel firm Esmark, in a $778m (£392m) deal which includes a $110m long-term loan.

Esmark accepted a cash purchase price of $17 per share, a 13.5% premium on Tuesday's closing share price.

Esmark chief executive James Bouchard said it needed a strategic partner as raw material and transport costs rose.

The global market for steel has been growing, with strong demand from developing countries such as China.

Last year, Essar bought Minnesota Steel for an undisclosed sum, only days after it also agreed to acquire Canadian firm Algoma Steel for $1.6bn.

This is big!

[ajay_ijn]

Essar, GMR in race to acquire Prague airport and Czech Airline CSA
http://www.domain-b.com/aero/gov_reg...430_essar.html
Prague: Indian industrial conglomerate Essar Group, as well as infrastructure company GMR Group are in the running for Czech airline, CSA and the Prague airport company, Letiste Praha, according to a report in the Czech daily, E15. According to Czech deputy finance minister, Ivan Fuska, both the companies could be sold to one investor.

The suggestion that privatisation of both companies could take place simultaneously suggests a more flexible approach to the sales process on the part of the government, after earlier press reports which said the airport would be privatised first.

Meanwhile, Czech private equity group, Penta Investments, and Indian industrial conglomerate, Essar, in a joint venture with Germany's Hochtief, are among the potential bidders for both the companies, E15 said.

According to reports, Air France, Russian flag carrier, Aeroflot, Czech company Penta Investments and US investment group, Odien Group, are reportedly interested only in the airline, while Indian firms, Essar and GMR Group, along with Singapore giant, Changi Airport, are amongst the bidders for the airport.

[Euromast]

Dr Reddy's announces acquisitions in UK, US

Dr Reddy's Laboratories has announced that it has completed the acquisitions of The Dow Chemical Company's Dowpharma Small Molecules business associated with its Mirfield and Cambridge sites in the UK and BASF's pharmaceutical contract manufacturing business and related facility in Shreveport in Louisiana, US.

Besides the two deals, DRL had acquired Jet Generici Srl, a company engaged in the sale of generic finished dosages in Italy, last month. The deal has been completed through Dr Reddy's Italian subsidiary, Reddy Pharma Italia SpA, which has been engaged in building a pipeline of registrations since its incorporation

[Euromast]

Kanpur-based MKU acquires German firm

City-based MKU pvt Ltd, a rapidly growing defence solution provider company, has acquired German AST Security Equipment Gmbh, a frontrunner in ballistic protection solutions, for about Rs 20 crore.

This acquisition will upgrade MKU's capacity and expertise in its existing line of armouring systems. AST specialises in armouring air and sea vehicles like helicopters, frigates and boats.

[ajay_ijn]

GTL acquires Essars Tower Biz for 1.5 billion USD

Acquisition of the latter's tower firm is likely to be announced next week.

GTL Infrastructure (GIL), a subsidiary of telecom network major GTL, has acquired Essar Group's tower company Essar Telecom Infrastructure (ETIPL) for an estimated $1.5 billion (Rs 6,000 crore), according to sources.

The deal, expected to be announced next week, will help GIL increase its tower presence by 50 per cent and consolidate its position as an independent infrastructure provider.

"The companies sealed the deal after weeks of intense negotiations. An announcement is slated to be made next week. The deal, believed to have been signed at a premium, is being pegged at around $1.5 billion," the sources told Business Standard.

GIL is believed to have acquired 100 per cent stake in the company through a mix of cash and stake, though this could not be confirmed. The sale will enable the Essar Group to become light on assets and concentrate on its cellular business.

The deal is also one of the largest in the telecom infrastructure space. Recently, the industry saw four such deals totalling more than $15 billion. This includes Reliance Communications 5 per cent stake sale in its tower business for Rs 1,400 crore and Bharti Airtel selling 10 per cent in its tower company for Rs 4,000 crore.

The deal will help GIL add another 3,500 cell sites (owned and operated by ETIPL) to its portfolio immediately, which would be increased to 20,000 towers by year-end.

When contacted, a GTL spokesperson declined to comment on the development, while an Essar spokesperson said: "Discussions are on. However, no transaction has been finalised yet."

GTL will use internal accruals to fund the acquisition. The company had raised $300 million (Rs 1,200 crore) through a foreign currency convertible bond (FCCB) issue and sanctioned a debt of $700 million (Rs 2,800 crore) by domestic and international banks. It had raised $85 million through a rights issue and $250 million through issue of warrants to the promoter group.

ETIPL is a closely-held subsidiary of the Essar Group and one of the largest telecom infrastructure service providers in the country. The company builds telecom towers and shares it with other operators in the country.

It has set up sites in Mumbai, Maharashtra, Madhya Pradesh, Rajasthan, Chennai, Tamil Nadu, Kerala, Karnataka, Andhra Pradesh, UP (East), UP (West) and Bihar and Orissa.

On the other hand, GIL has over 6,000 towers across 12 circles in the country and was to expand to eight more circles. The company had announced an investment of $1.7 billion (around Rs 6,800 crore) for setting up 25,000-shared telecom towers in the country.

GSM players Bharti Airtel, Vodafone-Essar and Idea Cellular are also spinning off their tower businesses into a separate entity.

Tata, Essar, Mittal seek stake in Indonesias Krakatau Steel

Tata Steel, Essar Steel and BlueScope Steel are all seeking stakes in Indonesia's state-owned producer of the metal, a government official said.

The three companies, along with ArcelorMittal, the world's biggest steelmaker, have sent letters expressing their interest in buying a stake in PT Krakatau Steel, Ansari Bukhari, director general of metal, machinery, textile and miscellaneous industries at Indonesia's industry ministry, said in Jakarta.

A larger partner will help Krakatau Steel gain expertise and double capacity to 5 million metric tonnes a year, Bukhari said.

Overseas steelmakers and Krakatau may benefit from rising demand for the metal in Asia's third-most populous nation as the lowest interest rate in three years boosts demand for houses and cars.

The companies "are interested to get into Krakatau Steel as they see the huge market potential in Indonesia,'' Bukhari said. Southeast Asia's biggest economy needs as much as 7 million tonnes of steel a year, he said.

Indian companies, fuelled by accelerating economic growth and gains in the rupee, are buying rivals abroad to add production capacity. Last year, Essar bought Algoma Steel Inc. and Minnesota Steel Industries LLC in North America. The company agreed to buy US-based Esmark on April 30.

"We continuously look for opportunities,'' said J Mehra, chief executive officer at Essar Steel Holdings, which owns India's third-biggest non-state steelmaker.

Earlier today Prashant Ruia, director at Essar Group said the company aims to increase production to 25 million tonnes by 2012.

Tata may present its plan for Krakatau in May, Bukhari said. Tata Steel bought UK's Corus Group last year for $12 billion, lifting the company to sixth from 56th in global rankings of steel producers.

India's steel demand is expected to grow 10 per cent annually over the next five years and is likely to touch 124 million tonnes by 2012, from 50 million tonnes annually, according to government estimates.

ArcelorMittal, owned by billionaire Lakshmi Mittal, met Indonesian
President Susilo Bambang Yudhoyono on April 10 to discuss plans to buy a stake in Krakatau and secure nickel and iron ore from PT Aneka Tambang. BlueScope, Australia's largest steelmaker, is "obviously interested" in the Indonesian government's talks on "the future" of Krakatau Steel, BlueScope said in an e-mail statement today.

[phaedrus]

MindTree to buy 52% in Aztecsoft for Rs 190 crore

IT and R&D services company MindTree on Friday said it was buying a majority stake in software services firm Aztecsoft for Rs 190 crore in one of the largest transactions involving listed IT companies in India.
MindTree will initially buy 32.57% of Aztecsoft at Rs 80 per share and follow it up with an open offer for an additional 20%. It will be paying Rs 190 crore in the all-cash deal, which values Aztecsoft at $90 million (Rs 360 crore). The acquisition will be funded by internal accruals.
ET had first reported about the development in its January 9 edition. “This transaction will be beneficial to both the companies,” MindTree CMD Ashok Soota said.
Aztecsoft undertakes outsourced product development (OPD) and provides independent testing services. It ended FY08 with a revenue of Rs 253.10 crore and a net profit of Rs 17.3 crore. MindTree’s FY08 topline was Rs 767.78 crore.It expects to close the open offer by end of August and sees the merger process being completed 14-15 months after that. The MindTree scrip closed at Rs 484.40 on the NSE on Friday, gaining 3.69%. Aztecsoft ended at Rs 78.40, up 2.95%. MindTree CFO Rostow Ravanan said the company had not decided on the mode of acquiring the remaining stake in Aztecsoft. It could consider either the cash or the equity option once the legal formalities of the merger are completed. The acquisition would help address a larger market with the expanded service offerings, MindTree officials said. The OPD market is estimated at about $8.5 billion and growing at 30% while the testing market is worth $6.1 billion growing at 40%.
The combined entity will have a revenue of $250 million (Rs 1,000 crore) and over 7,800 employees in Bangalore, Chennai, Hyderabad, Pune and Bhubaneswar. Though MindTree will be accounting for the revenues of Aztecsoft following the open offer, it has not changed the revenue projection of $228-$238 million for the current fiscal.Synergies between the two compaines would ensure that operating margins expand despite Aztecsoft’s lower margins, MindTree officials said.

source economictimes epaper

[phaedrus]

Bharti in talks to buy South Africa’s MTN

IN what may turn out to be the largest-ever acquisition by an Indian company, the country’s biggest private telecom player Bharti Airtel on Monday said it was in talks to acquire South Africa’s MTN. This is the first time that both companies have officially confirmed they have entered into discussions for a possible stake sale.
The board of MTN, South Africa’s largest telco, is learnt to have met on Monday to discuss the potential buyout from Bharti. The Bharti spokesperson refused to divulge details, but said: “Bharti Airtel has entered into an exploratory discussion with MTN Group, South Africa. Discussions are still at an early stage, are exploratory in nature and may or may not lead to any transaction.”
Following the board meet, MTN too issued a statement confirming that talks were on with Bharti. “The discussions are exploratory in nature and may or may not lead to any transaction. Accordingly, shareholders are advised to exercise caution when dealing in the company’s securities until a further announcement is made,” the South African telco said.
Bharti Airtel chairman Sunil Mittal had made two important points in a post-results earnings call last week, which indicated that Airtel could well be looking at an acquisition of the magnitude of MTN; if not fully, then at least a substantial stake.
One, Mr Mittal said, “The business model we have invented at Bharti needs to be transferred globally. We always remain open to opportunities outside India.”
MTN has operations in 21 countries in Africa and the Middle East. The Indian model of low tariffs and high volumes can easily be replicated in these nations where demand for cellular services is high and volumes are related to tariffs. Second, he said, Airtel will no longer look at “tiny” acquisitions and anything from “medium to meaningful” will form a part of Airtel. MTN has 68 m customers across Africa, Middle East
MTN, with over 68 million subscribers at March-end, is definitely not tiny. MTN’s buyer will get instant access to Nigeria, Republic of Congo, Rwanda, South Africa, Uganda, Zambia, Iran, Afghanistan, Ghana, Sudan, Syria, Yemen and other countries where the operator is present.
Bharti will have to shell out over $35 billion to acquire 100% of MTN. Bharti might have to pay a premium, which could push the cost even higher. Even a 51% stake sale in will result in an $18-billion-plus deal, the largest ever by an Indian company. In comparison, Vodafone had acquired a controlling stake in Hutchison Essar for under $12 billion. Tata’s buyout of Corus was just over $13 billion.
Monday’s developments also resulted in MTN’s shares rising by a record 5.50 rand, or 3.8% to 150 rand, which marks the highest-ever closing price in the company’s history. On the other hand, Bharti Airtel’s share price was down Rs 6.3, or 0.7%, to 893.95 on the BSE.
ET has learnt that Bharti is looking at two options — acquire a 51% stake in MTN and continue to allow the company to be listed on the Johannesburg exchange or buy out the company and then offer a cash-and-share sweetener to its shareholders by going in for a secondary Johannesburg exchange listing.
MTN’s customers are spread across Africa and the Middle East. Its subscriber base is just a little larger than Bharti Airtel’s. MTN has a market cap of more than $35 billion while Bharti is valued at about $45 billion. Sources added that Bharti is being advised by Standard Bank on this deal, while Merrill Lynch and Deutsche Bank were advising MTN.

source economictimes epaper

[mhp]

Originally Posted by sn1101

Bharti in talks to buy South Africa’s MTN



source economictimes epaper

A few more features of the supposed deal:

• A 51% stake ($19 bn) would be seven times the amount India invested in the whole of Africa over the ten years to 2004.
  
• Bharti would be marrying up: MTN has stronger revenues ($10.7 billion compared with Bharti's $6.8 billion) and higher profits ($4.7 billion to and $2.8 billion for Bharti).