New Delhi: Mergers and acquisitions (M&A) in India have been at an all-time high in 2021. From start-ups to large conglomerates to multinational companies – everyone is going for M&A deals.
These deals were led mostly by first-time buyers, in a report titled ‘M&A: Acquiring to Transform’, as suggested by Bain & Co. About 80 percent of M&A deals were closed in 2020 and 2021, an increase of less than 70 percent from 2017 to 2019.
According to the report, the increase in the pace of such deals has mostly accelerated due to the COVID-19 pandemic. Companies are using M&A deals to transform their business in the post-Covid world, the report said, adding that higher cash reserves, increase in foreign direct investment (FDI) and lower interest rates Along with rates, companies are responding to disruptions through acquisitions.
These deals helped the Indian ecosystem to see massive inflow of capital in 2021, mostly from overseas.
According to a news report, Indian start-ups have raised around $39 billion in 2021, an increase of 255 percent from $11.8 billion in 2020.
A PwC report showed that large strategic investments or acquisitions dominated the deal space in 2021. Corporate and private acquirers have stepped up their search for megadeals and deals worth $5 billion have already been entered this year.
The M&A megadeal reflects continued interest in consolidation in areas such as renewable energy, infrastructure and education.
Private Equity (PE) funds have shown their faith in India’s growth story and have made long term investments in spite of COVID.
India-focused dry powder has helped PE funds, and is expected to record more big-ticket deals from established companies with more liquidity.
According to a news report, Indian start-ups have raised $39 billion this year (as of December 4, 2021), a 255 percent increase from $11.8 billion in 2020.
Major Mergers, Acquisitions and Acquisitions at a Glance
BYJU acquires Aakash Educational Services
On 5th April Think & Learn Pvt. Ltd., BYJU’s parent firm, acquired education company Aakash Educational Services from The Blackstone Group for $1 billion. BYJU spent more than $2.4 billion on acquisitions this year, which includes big tickets like Aakash, EPIC, Great Learning and others. This will be the third US-based start-up acquisition by BYJU after Osmo and online reading platform Epic. BYJU is likely to go for an IPO of over $40 billion in 2022.
Zomato acquires Fitso
Indian foodtech platform Zomato has acquired full-stack sports facility provider and discovery start-up Fitso in a deal reportedly worth Rs 80 crore to Rs 100 crore. The deal was first speculated in September 2020, while more details emerged later. This is Zomato’s first major acquisition after UberEats’ India business, which it bought for $350 million (Rs 2,554 crore) in January 2020. It also hints at the company’s strategy to diversify its revenue streams beyond its core food delivery business and into sports and nutrition. , which is characteristic of Fitso.
Sony and Zee merger
Sony Pictures Networks India and Zee Entertainment Enterprises on December 22 announced that they have signed definitive agreements for their merger after the conclusion of a special negotiation period during which both sides exercised due diligence. Sony will invest $1.575 billion and hold 52.93 per cent stake in the merged entity, while Zee will hold the remaining 47.07 per cent.
Air India acquisition of Tata Group
The Center has signed a share purchase agreement with Tata Sons for the sale of national carrier Air India for Rs 18,000 crore. Earlier in October, the government had accepted a proposal from Tales Pvt Ltd. Ltd., a unit of the Tata Group’s holding company, to repay Rs 2,700 crore in cash and take over Rs 15,300 crore of the airline’s debt. According to a statement, Tata will hold 100 per cent stake in Air India as well as 100 per cent in its subsidiary Air India Express and 50 per cent in joint venture Air India SATS (Airport Services on Ground and Cargo Handling). Air India and AIXL have a total permanent and contractual workforce of 13,500.
Adani Green buys SB Energy
Adani Green Energy closes India’s largest renewable M&A deal for $3.5 billion – a 46 percent increase in operating capacity. SB Energy India is now a 100% subsidiary of Adani Green Energy.
Wirpo acquires consultancy firm Capco
Wipro, a leading global information technology, consulting and business process services firm, has signed an agreement to acquire Capco, a global management and technology consultancy that provides digital, consulting and financial services to financial institutions in the Americas, Europe and the Asia-Pacific. Provides technology services. for $1.45 billion. London-based Capco’s clients include many prominent names in the global financial services industry.
Gangavaram port acquired by Adani Ports
Adani Ports and Special Economic Zone has acquired DVS Raju and family’s 58.1 per cent stake in Gangavaram Port Ltd. The deal is worth Rs 3,604 crore and is subject to regulatory approval. Adani Ports had on March 3, 2021 announced the acquisition of Warburg Pincus’ 31.5 per cent stake in Gangavaram Port and with this acquisition, Adani Ports will have an 89.6 per cent stake in Gangavaram Port Ltd. Gangavaram port, which is located next to Vizag port, is the second largest non-major port in Andhra Pradesh, with a capacity of 64 MMT installed under a concession from the Government of Andhra Pradesh extending up to 2059.
IndiGrid buys NER-II transmission
Indigrid completed the acquisition of NER-II Transmission from Sterlite Power in March at an enterprise value of Rs 4,625 crore. India Grid Trust (Indigrid) is the country’s first and largest power sector Infrastructure Investment Trust (InvIT). With this acquisition, Indigrid’s Asset Under Management (AUM) increased by 34 per cent to Rs 20,000 crore.
Mahindra Logistics acquires Meru Mobility Tech
Mahindra Logistics said that third-party logistics solutions provider Mahindra Logistics has acquired 100 per cent equity share capital of Meru Mobility Tech Pvt Ltd, V-Link Fleet Solutions Pvt Ltd and V-Link Automotive Services Pvt Ltd from Meru Travel Solutions Pvt Ltd Is. The overall deal size is Rs 100.9 crore.
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