02 October, 2007

INDIA - serious global M&A players in 2006.

Indian companies made a strong statement as serious global M&A players in 2006.

The Top 10 outbound M&A deals notched up by Indian companies in overseas markets totaled $5.23 billion (not counting the pending $9.2-billion Tata Steel bid for UK steelmaker Corus Group).

The Top 10 inbound deals, on the other hand, totalled $4.99 billion, reversing earlier trends where inbound transactions have typically exceeded outbound transactions.

Two of the most high-profile outbound deals during the last year came from the pharma sector — Dr. Reddy’s $571- million acquisition of Germany’s fourth largest generic company betapharm (it beat Delhi-based Ranbaxy Labs to the deal) and Ranbaxy’s $324-million acquisition of Romanian pharma company Terapia.

Ranbaxy is currently on an acquisition spree aimed at propelling it to the list of the top five generics companies in the world. Not to be outdone by the betapharm miss, the $1.17-billion drug maker announced its intent to bid for the $2-billion generics business of German drug maker Merck (see ‘What’s The Big Deal’ on page 8).

There was plenty of action on the inbound side as well. The most notable deal was US leveraged buyouts giant Kohlberg Kravis Roberts’ India debut with the $850-million acquisition of US-based Flextronics’ Indian IT assets. T

he IT services sector’s other big deal in the year was Texan major Electronic Data Systems’ $380-million acquisition of Mumbai-based MphasiS BFL.

The telecom sector also saw a few mega deals — Maxis picked up 74 per cent in Aircel for $1.08 billion, Providence Equity Partners and Citigroup picked up about 20 per cent in Idea Cellular for $988 million and Singapore’s Temasek Holdings picked up 9 per cent of Tata Teleservices for $300 million.

Overall, the Indian M&A market (inbound, outbound and domestic) saw 1,141 deals worth $26.6 billion last year

Bangalore-based research firm Grant Thornton India puts the numbers lower at $20.3 billion across 480 deals (Grant Thorton categorises deals such as KKR-Flextronics and Idea-Providence, as private equity deals).

The Asia market excluding Japan turned in $201.53 billion worth of M&A transactions across 6,216 deals, according to Thomson Financial.