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Walmart buys Flipkart for $16 billion: 5 big mergers and acquisition deals by Indian companies

The USD 12.7 billion Idea Cellular-Vodafone India deal was the largest transaction in 2017.

Walmart buys Flipkart for $16 billion: 5 big mergers and acquisition deals by Indian companies

New Delhi: Walmart Inc on Wednesday officially announced to pay USD 16 billion for a roughly 77 percent stake in Indian online shopping site Flipkart, making it the US retailer`s biggest foreign investment ever.

According to global deal-tracking firm Mergermarket, the USD 23 billion Idea Cellular-Vodafone India deal was the largest transaction in 2017, while Reliance Jio Infocomm's USD 3.7 billion acquisition in wireless spectrum, towers, fibre and media convergence node assets of Reliance Communication (RCom) was the second largest deal in 2017.

Here is looking at India's five big merger and acquisition deals

Vodafone-Idea Merger

The USD 12.7 billion Vodafone India-Idea Cellular merger is awaiting the statutory approvals, following which the merged Idea-Vodafone entity will have highest subscriber base of 41 crore accounting for over 35 percent market share and second largest spectrum holding of 1,850 megahertz in the country.

The merger is expected replace Bharti Airtel from its numero uno position which it has maintained in Indian telecom market with highest number of subscriber base at least since last one decade as per reports of the Telecom Regulatory Authority of India. The amalgamation will result in capex synergies, since it will eliminate the duplication of spectrum capacity and infrastructure related requirements.

Currently, the department of Telecom is waiting for the DIPP to raise foreign direct investment limit in Idea Cellular Ltd. to 100 percent, before approving its merger with Vodafone India.

Ranbaxy-Sun Pharma Merger

The Ranbaxy-Sun Pharma in 2015 fortified Sun Pharma's position as the world's fifth largest specialty generic pharma firm and the top-ranking domestic pharma company with significant lead in the market share. Sun Pharma acquired troubled rival Ranbaxy in an all-stock transaction worth $4-billion that includes $800 million debt.

The combined entity's manufacturing footprint covers five continents with products sold in over 150 nations with a stronger presence in the US, India, Asia, South Africa, CIS & Russia and Latin America.

Tata Motors-Jaguar Land Rover Merger

Tata Motors acquired the Jaguar Land Rover businesses from Ford Motor Company for a net consideration of US $2.3 billion in an all-cash transaction in 2008. Ford contributed about USD 600 million to the Jaguar Land Rover pension plans.

The purchase consideration included the ownership by Jaguar and Land Rover or perpetual royalty-free licences of all necessary Intellectual Property Rights, manufacturing plants, two advanced design centres in the UK, and worldwide network of National Sales Companies.

Cairn-Vedanta Merger

The merger of cash-rich oil producer Cairn India into its debt-ridden parent Vedanta Ltd completed in 2017. After absorbing its cash-rich subsidiary, Vedanta had a larger pro forma market cap of USD 15.6 billion and higher free float of 49.9 percent.

The merger consolidated Vedanta's position as one of the worlds largest diversified natural resources companies, with world-class, low-cost assets in metals and mining and oil and gas.

Bharti Airtel -Zain Telecom Africa Merger

In 2010, Bharti Airtel completed a deal to buy Kuwait-based Zain Telecom's African business for $10.7 billion (about Rs 48,000 crore). Bharti had entered the deal to acquire Zain Telecom's operations (Zain has operations in 17 African countries) in 15 nations, excluding Sudan and Morocco.  The acquisition, besides giving Bharti its much-desired presence in Africa, made it the world's fifth largest wireless company with operations across 18 countries and a subscriber base of around 179 million (at the said time period).

List of other important deals

  • Rosneft, the Netherlands-based Trafigura Group Pte -- one of the world's biggest commodity trading companies, and Russian investment fund United Capital Partners acquired Essar Oil for $12.9 billion in August 2017.
  • USD 9.73 billion merger between Analjit Singh-promoted Max Financial Services Ltd and mortgage lender Housing Development Finance Corporation created the largest private-sector life insurer in the country in 2016.
  • UltraTech acquired cement business of Jaiprakash Associates for USD 2.4 billion in 2016.
  • Nirma acquired Lafarge India for USD 1.4 billion in 2016
  • BP Plc bought 30 per cent stake in 23 oil and gas blocks of Reliance Industries for USD 7.2 billion in 2011.
  • Japanese drug maker Daiichi Sankyo paid up to USD 4.6 billion for control of Ranbaxy Laboratories Ltd in 2008.
  • NTT DoCoMo Inc in 2008 agreed to pay USD 2.7 billion for a 26 per cent stake in Indian telecom firm Tata Teleservices, giving Japan's top mobile operator a foothold in the world's fastest-growing major mobile market.
  • Vodafone entered India in 2007, paying USD 11.1 billion to buy 67 per cent controlling stake in Hutchison Whampoa Ltd's mobile business in India. PTI MBI ANZ SA

With PTI Inputs