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2010’s M&A Scorecard: Telecom, Energy & Pharma Rule

05 January, 2011

Year 2010 pretty much matched up with 2007 in terms of M&A deal activity, but it still was a long list of hits and misses. After two misses in earlier year  to gain a big bang entry into Africa, Bharti did strike a multi-billion dollar transaction in the continent, but Fortis almost saw the bone (read: Parkway) snatched away from its mouth dealing a temporary setback to its ambition of becoming the biggest Asian healthcare group at one shot. Reliance also almost struck the biggest deal ever by an Indian firm even as its plans to buy out LyondellBassell fell through. Here goes the bygone year’s roster:

Bharti Airtel-Zain Africa: The biggest deal of the year was over six times the size of the   previous year and marked the return of billion dollar plus overseas buy by an Indian firm. After having failed in its attempt to strike a deal with South Africa’s MTN, Bharti Airtel snapped up Kuwait’s Zain Telecom’s African business for $10.7 billion. This made it the fifth largest telecom firm in the world by subscribers having crossed 180 million consumers spread across a dozen and half countries. More importantly Bharti Airtel is looking to tap into the next growth market Africa.

Vedanta-Cairn India: Another multi-billion dollar deal was when London-listed Vedanta  Resources plc said it will acquire Cairn India, a unit of the UK’s Cairn Energy, to foray into the oil sector. Vedanta plans to buy 51% to 60% stake in Cairn India Limited for approximately $8.5-9.6 billion (nearly Rs 40,000 crore). Vedanta Resources will hold 31-40% of Cairn India directly while Sesa Goa, its subsidiary, will acquire 20%. The deal, which has run into several regulatory bottlenecks, still has to be approved by the government.

Piramal-Abbott Laboratories: The sell-offs in the Indian pharmaceutical industry continued.    NYSE-listed pharma major Abbott Labs acquired Piramal’s Healthcare Solutions business (Domestic Formulations) for an up-front payment of $2.12 billion plus $400 million annually for the next four years. The deal pushed Abbott to the number one slot in the Indian pharma    landscape. Piramal Healthcare continued its sell-offs later in the year as it also sold its diagnostic services business to Super Religare Laboratories for Rs 600 crore.

Adani-Linc Energy: While a number of players in India Inc. were hunting for mines across the globe, Adani Enterprises acquired Australia-based Linc Energy’s coal assets for about Rs 12,600 crore in a cash and royalty was by far the biggest deal. The Galilee mine will be operational in four years and will be able to supply up to 20,000 megawatts of generating capacity to Adani Power, part of the Adani group.

GTL-Aircel: If the biggest deal was in telecom, telecom infrastructure was not far behind. Manoj Tirodkar-led GTL acquired 17,500 towers from telecom operator Aircel for Rs 8,026 crore, in a consolidation move at the lower end of the tower business sector. Although GTL later failed to  see through an announced multi billion dollar deal to acquire tower business of Reliance Infocomm, it managed to become a mid-sized tower firm through the earlier transaction.


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2010’s M&A Scorecard: Telecom, Energy & Pharma Rule

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