India”s Top 4 Business Weddings & Engagements of 2010 [MERGERS]

Posted on January 21, 2011 in Business and Economy

By Apoorva Dixit:

Indian businesses took a new turn in 2010. While small companies raised millions in funding, the big ones got engaged. 2010 was truly the year of partnerships, mergers and marriage of concepts. Let’s have a look at the biggest:

1) TATA Chemicals’ engagement with British Salt — 20th Dec 2010:

British Salt is UK’s leading manufacturer of pure dried vacuum salt products. The main uses of these salt products are as water softeners, in chemical industry, food processing etc. In UK, it enjoys a comfortable 50% market share. It is based in Middlewich, Cheshire and has a production capacity of at least 7.20 lack tones a year. Tata Chemicals on the other hand is a Tata Group company based in Mumbai. Tata Chemicals had acquired 100% stake in US based General Chemical Industrial Products (GCIP) for $1.05billion (Rs. 4000cr) earlier in 2008 and became world’s second largest maker of soda ash.

Tata Chemicals’ UK subsidiary Brunner Mond has signed a binding agreement to acquire 100% stake of British Salt Ltd for Rs.650 crore on 20th Dec 2010. The acquisition is financed through debt by Tata Chemical on a non recourse basis. This deal adds one more milestones in Tata Group’s string of cross border acquisition.

2) ICICI Bank and Bank of Rajasthan — 23rd May 2010:

ICICI Bank is the second largest bank in India and the largest private sector bank in India by market capitalization. It has branches and representative offices in 19 countries. ICICI Bank has an asset base of Rs.3.63 trillion and posted a net profit of Rs.4,025 crore in 2010. Bank of Rajasthan (BoR) was setup at Udaipur in 1943. BoR has 463 branches and 111 ATMs. BoR’s asset base was Rs.17,224 crore and in first nine months of fiscal 2010, its net loss was Rs 9.82 crore.

BoR was paid Rs.3000 crore and it has merged with ICICI Bank. The BoR acquisition has helped ICICI, who has 2000 branches and 5200 ATMs, to strengthen its network in northern as well as western India. Thus, its branch network increased by 25%.

3) India’s Airtel weds Kuwait’s Zain in Africa — 8th June 2010:

Zain Group is a mobile telecommunication company founded in 1983 in Kuwait. Zain had presence in more than 20 countries in Africa and Middle East. Bharti Airtel Limited (Airtel), 5th largest telecom operator in the world, is the popular Indian telecommunication company that operates in more than 15 countries. It enjoys 29% market share in GSM mobile service in India.

On the above mentioned date, the largest ever telecom takeover by an Indian firm was successfully accomplished. Airtel has bought Zain’s business in 15 African countries for $10.7billion. Soon after the deal, in August, Airtel announced to acquire Seychelles for Rs.288 crore and expand its footprint in Africa to 16 countries.

4) Mahindra’s international date with SsangYong — March 2011 [Expected]

SsangYong Motor Company is the fourth largest South Korean automobile manufacturer. It has a very illustrious history of acquisition and partnership. It was a part of SsangYong Group, a multibillion dollar conglomerate. The group was broken apart because of the problems during the South East Asian crisis of 1997. Mahindra & Mahindra Limited (M&M) a part of Mahindra Group based in Mumbai. It has recorded revenue of $6.93 billion with net income of US$ 623.11million.

M&M has been selected as the preferred bidder and is expected to gain a controlling stake in the company by March 2011. The planned acquisition, which has been approved by South Korea’s Free Trade Commission, will cost M&M US $463million. M&M aims to utilize the technological strength of SsangYong.

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