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Top 10 Mergers & Acquisitions Deals According To M&A Advisory Firms In India

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India is one of the largest economies in the world with an extremely vibrant business environment featuring all types of business activities. Over the past few years, the country has witnessed large mergers & acquisition deals involving local as well as overseas entities, which have been carried out by businesses with an objective of either consolidating their position or entering a new domain.

According to news reports, the total worth of these deals was around $97.6 billion as calculated earlier this year helping not only the companies involved but also the M&A consultants in India roped in for advice.

A list of the top deals according to M&A advisory firms in India is being presented here.

1. Walmart’s Acquisition Of Flipkart

One of the most talked about deals which excited experts at all merger and acquisition firms in India and was announced in May 2018 before being completed in August the same year after the American retail giant Walmart completed its $16 billion investment in the Indian e-commerce company Flipkart to acquire the majority stake.

Walmart is now in control of over 77% shares of the company and the investment capital includes $2 billion in new equity funding. The deal gives the American company entry into Indian markets and also brings its rivalry with Amazon to a new geographical location.

2. Vodafone India And Idea Merger

The merger of two of the country’s biggest private telecom operators was completed recently to create a new entity called Vodafone Idea Ltd., which has emerged as India’s biggest telecom service provider with a subscriber base of 408 million.

According to the new company, the merger is expected to generate an annual synergy of Rs140 billion including the operational expenditure of Rs 84 billion equivalent to a net value of Rs 700 billion approximately. The Rs 67.5 billion equity infusion at Idea and Rs 86 billion at Vodafone along with the monetization of towers of both companies for an enterprise value of Rs 78.5 billion enrich the company with a cash balance of Rs 193 billion.

3. Vodafone’s Acquisition Of Hutchison Essar

In 2007, Vodafone paid $10.9 billion in cash to Hong Kong’s Hutchison Telecom to acquire a majority stake in its Indian entity Hutchison Essar. The deal, one of the largest in Asia at that time gave England based Vodafone a foothold in the then rapidly growing Indian telecom services market. Hutchison Telecom was said to have made an estimated pre-tax gain of $9 billion after the successful closure of the deal.

Vodafone owned 52% of the Hutchison Essar stake directly with options over 15% held by Hutch Essar Managing Director Asim Ghosh, investment company IDFC and Max India Chairman Analjit Singh, after the acquisition. Most experts at M&A firms in India remember the deal for the minor controversy surrounding it regarding whether Hutchison Essar violated the country’s company ownership rules.

4. Rosneft Acquires Essar Oil

Last year, in the month of August after two years of negotiations, India’s Essar group sold its flagship company Essar Oil to Russian energy giant Rosneft in a deal valued at $13 billion. Consultants at reputed M&A advisory firms in India note that the sale came as a relief for Essar as the conglomerate was saddled with a huge debt after it spent considerable resources in establishing oil refinery and steel and power plants.

5. Ranbaxy Merger With Sun Pharmaceuticals

In April 2014, two of the biggest players in the Indian pharmaceutical industry, Sun Pharmaceuticals and Ranbaxy Laboratories announced their merger which was estimated to be about $4 billion in valuation. The shareholders of Ranbaxy received 0.8 shares of Sun for each Ranbaxy share.

This was the second time that Ranbaxy was involved in such a big M&A deal, with the first being in 2008 when Daiichi Sankyo acquired a stake in the company in an arrangement valued at $4.6 billion.

6. E-commerce Major Snapdeal Acquires Freecharge

Another deal that professionals at Mergers and Acquisitions consulting firms remember is when major online marketplace Snapdeal acquired the online recharge platform Freecharge for $400 million.

It was reported at the time that the deal involved 70% stock and 30% cash and it was Snapdeal’s fifth acquisition that year when it was engaged in fierce competition with rival Flipkart.

7. Merger Of TaxiForSure With Ola

Investors persuaded Ola, the Indian online cab aggregator to merge with a smaller rival, TaxiForSure in 2015 in a deal estimated to be about $200 million in valuation. A mostly stock swap deal with the swapping ratio being about one Ola share for seven shares of TaxiForSure.

The move as aimed at consolidation and posing a strong challenge to the overseas competitor, Uber in the local market.

8. Flipkart’s Acquisition Of Myntra

Two of the nation’s biggest e-commerce companies joined hands in an estimated Rs 2,000 crore deal in 2014. Myntra getting acquired by Flipkart which is said to be influenced by their common investors, Accel partner and Tiger Global was the largest M&A transaction in the Indian e-commerce sector at the time.

The companies remained as two different entities but people holding stock options in Myntra hold the same in Flipkart.

9. Ibibo Group Merges With MakeMyTrip

India’s leading travel portal MakeMyTrip merged with the Ibibo group, better known as owners of the online travel aggregator, Goibibo in 2016 in a transaction whose valuation was not disclosed but was estimated by experts to be worth $400-$450 million worth.

The deal was structured in such a way that Ibibo’s owners, Naspers and Tencent sold their stake to MakeMyTrip and then went on to hold 40% in the new entity.

10. UltraTech Acquires Jaypee Cements

Aditya Birla Group’s UltraTech Cement acquired Jaiprakash Associates’ Jaypee Cements including all its cement plants and grinding units for Rs 16,189 crores last year. It consolidated UltraTech’s position which is India’s largest building material manufacturer and came as a relief to the lenders of Jaiprakash Associates.

Conclusion

This list of country’s top M&A deals compiled after valuable inputs from M&A advisory firms in India demonstrates how not only overseas enterprises but Indian companies are using the transaction as a strategy for consolidating their position in the market.