The overall merger & acquisition (M&A) activity revived with a clutch of billion-dollar-plus deals. Several multi-national companies (MNCs) increased their holdings in India units through market route or indirect restructuring. With India headed for critical national elections in the coming year, many inbound deals were pushed back for better clarity over the policy stance of the new government.
While there were a few significant transactions in the respective sectors such as Etihad’s deal with Jet Airways, Fortis turning back on its overseas acquisition strategy and so on, some deals outshone the rest.
Here is a look at the top five M&A deals of the year including those public market transactions linked to voluntary open offer.
OVL, Oil India buy stake in Mozambique gas field - $5.1 billion
ONGC Videsh Ltd (OVL), the overseas arm of oil & gas exploration major ONGC, signed a definitive agreement to buy Anadarko Petroleum Corporation's 10 per cent stake in Rovuma Area 1 Offshore Block in Mozambique for $2.64 billion. OVL and Oil India had earlier agreed to jointly buy a 10 per cent stake in the same gas field from Videocon Group for $2.48 billion.
Recent discoveries have turned Mozambique's Rovuma offshore field into a major draw for global energy producers and boosted Mozambique's gas reserves to around 150 trillion cubic feet. The Rovuma field has the potential to become one of the world's largest liquefied natural gas (LNG) producing hubs by 2018 and is located close to the Indian market, adding to its attraction.
Unilever's open offer for HUL - $3.2 billion
Anglo-Dutch consumer goods giant Unilever made an open offer to buy additional 22.52 per cent stake in its India unit Hindustan Unilever Ltd (HUL), looking to hike stake to 75 per cent. The firm was looking to shell out $5.4 billion in offer. But the public tendered shares represented around two-thirds of it, which allowed Unilever to increase its stake to 67.28 per cent for $3.2 billion (Rs 19,180 crore).
Unilever's was the largest open offer ever, leading a bunch of other such moves. London-listed GlaxoSmithKline Plc made open offer for GSK Pharmaceuticals and GSK Consumer Healthcare. McGraw Hill Financial, the owners of global rating agency Standard & Poor's (S&P), increased their stake in India's leading credit rating company Crisil from 67.8 per cent from 52.8 per cent.
Holcim restructures India holdings - $2.5 billion
Swiss cement maker Holcim is restructuring its holdings in India in a move which will see it encashing a large sum while retaining majority stake in both its cement companies in the country. The restructuring will increase its stake in the local unit, Ambuja Cements Ltd, to 61.39 per cent from its current stake of just over 50 per cent while making ACC Ltd a direct subsidiary of Ambuja Cements.
While the deal drew flak for not bringing any direct benefit to the retail shareholders since the restructuring does not change the overall control of either of the firms, which remains with Holcim, it did not trigger an open offer. The firm eventually got the green signal.
Mylan acquires Agila Specialities - $1.75 billion
Drug maker Strides Arcolab Ltd sold Agila Specialties division to Mylan Inc for a total consideration of up to $1.75 billion. The US-based firm said Agila will bring a broad product portfolio of more than 300 filings approved globally and marketed through a network covering 70 countries, including 61 abbreviated new drug applications (ANDAs) approved by the USFDA. After the deal was closed, Strides Arcolab said it will pay a special dividend of Rs 500 per equity share.
Vodafone’s stake buy in India arm from Piramal Enterprises - $1.4 billion
The world’s largest mobile operator by revenues, beset with recurring tax demands for buying a stake in Indian telecom venture from Hutchison years ago, is now in the final leg to complete the buyout of minority stakeholders in its Indian arm. Vodafone is paying around $1.6 billion to buy Piramal Enterprises and Max Group chief Analjit Singh for their combined 36 per cent odd stake. The bigger slice would go to Piramal Enterprises which makes a cool $500 million in little over two years. Piramal Enterprises has struck a neat harvest from its investment of around Rs 5,863 crore in two tranches between August 2011 and February 2012 to buy 11 per cent stake in Vodafone India, for deploying the bundle of cash it got from the $3.7 billion deal by selling a large chunk of its pharma business a few years ago. It makes just over Rs 3,000 crore in capital gains alone from the exit.
(Edited by Joby Puthuparampil Johnson)