December 2nd, 2023
MergerDomo’s weekly Newsletter brings you the latest on M&As, JVs, Investments and noteworthy partnerships that are shaping the future of businesses in India.
This week's M&A highlights in India feature significant deals, such as -
JSW Group and SAIC Motor announce a strategic joint venture in India, with JSW holding a 35% stake, aimed at expanding MG Motor's operations in the country. The collaboration focuses on green mobility solutions, facilitating MG's local expansion and JSW's entry into the growing electric vehicle sector. Amid heightened scrutiny on Chinese investments, the deal brings advanced technology to the venture. JSW's emphasis on "green mobility solutions" aligns with the joint venture's plan to lead in the electric vehicle ecosystem through local sourcing, enhanced charging infrastructure, increased production capacity, and a broader vehicle range.
Read more lessSynopsis: Whirlpool Corporation plans to sell up to 24% of its stake in Whirlpool of India Ltd in 2024 to alleviate debt, according to a regulatory filing. The American home appliances giant aims to use the proceeds to enhance balance sheet flexibility while retaining a majority interest in its Indian subsidiary. This strategic move comes after Whirlpool of India reported a decline in profits amid heightened competition. The company emphasizes its commitment to India's growth and expansion despite the stake sale. The deal's value remains undisclosed, with no expected impact on Whirlpool Corporation's full-year forecast.
Read more lessThe Jaspal Bindra-led Centrum Group is considering a significant move in its housing finance business, with plans to either fully exit or reduce its stake to a minority position. The group, holding 60%, collaborates with Morgan Stanley (25%) in Centrum Housing Finance. EY has been engaged to explore strategic options. Despite transferring other lending businesses to Unity Small Finance Bank, challenges arose due to Morgan Stanley's stake. The move follows Centrum's acquisition of PMC Bank and aligns with its diverse financial services portfolio, including wealth advisory, investment banking, and asset management.
Read more lessHinduja Tech (HTL), the digital technology arm of Hinduja Group's flagship Ashok Leyland, is in early discussions with private equity funds to sell a minority stake, aiming to raise USD 100 million at a valuation of USD 400 million. With Rothschild engaged for investor search, the move supports HTL's expansion in the e-mobility sector. The company, 74% owned by Ashok Leyland, focuses on automotive solutions and boasts key clients like Daimler and Renault. Amid talks, HTL aims to strengthen its position for growth, particularly in the dynamic e-mobility industry.
Read more lessIn a regulatory filing, Life Insurance Corporation of India (LIC) revealed a 2% reduction in its stake in Engineers India, selling 1.14 crore shares between February 2021 and November 2023. The average price per share was INR 118.08, leading to a decrease in LIC's overall stake from 5.155% to 3.122%. Engineers India, operated by the Government of India, witnessed a remarkable turnaround with a 12.65% positive return in CY22. Despite recent fluctuations, LIC's move aligns with the company's evolving financial landscape and continued focus on diversification and overseas expansion.
Read more lessPromoters of DB Realty have successfully sold a nearly 3% stake in the company, generating INR 301 crore, and simultaneously injected a substantial amount back into the real estate firm. The funds, utilized to repay related party transactions and interest-free loans, have facilitated DB Realty's complete debt retirement, rendering the company debt-free on a standalone basis by November 30, 2023. This strategic move, coupled with a decoupling exercise from the promoter group, has empowered DB Realty to pursue asset monetization and joint ventures, further enhancing its financial position.
Read more lessHindustan Zinc Ltd's (HZL) corporate restructuring plan, initiated in September, raises concerns over the government's plan to sell a portion of its 29.54% stake through an offer for sale (OFS) this fiscal year. The restructuring, proposing separate legal entities for HZL's key businesses, may cause delays, impacting the INR 51,000 crore disinvestment target for FY24. Vedanta Ltd's 64.92% ownership in HZL adds complexity to the situation. Uncertainties stemming from the restructuring may affect investor confidence, emphasizing the need for clarity on HZL's roadmap before the government proceeds with the OFS.
Read more lessAnt Group, through its entity Alipay Singapore Holdings, has executed a series of exchanges, selling a 3.4% stake in Zomato for INR 3,337 crore. The block deals, disclosed in BSE bulk deals data, involved 297 million shares at INR 112.70 per share. Zomato's shares rose 2.55% to INR 116.70. Notable buyers include Morgan Stanley, Fidelity, Government of Singapore, Franklin Templeton Mutual Fund, BofA Securities, Societe Generale, and Vanguard. This divestment comes after Alipay's USD 360 million investment in Zomato in 2018, marking a strategic move amid the food delivery app's notable stock surge in the past year.
Read more lessTokyo Gas Co., Ltd. is actively pursuing a minority stake in Think Gas Distribution, an Indian natural gas supplier owned by private equity firm I Squared Capital. Tokyo Gas, Japan's largest city gas provider, is conducting due diligence for a potential acquisition of about 30% stake in Think Gas, valuing the company at USD 1-1.2 billion. The move aligns with Tokyo Gas's broader strategy to invest in cleaner fuels and renewable power, aiming to double its profits by 2030. The competition for the stake also involves UAE's sovereign wealth fund, Mubadala Investment.
Read more lessLIC, the promoter of IDBI Bank, reveals plans to retain a portion of its stake in the bank to leverage the benefits of bancassurance. While LIC and the government jointly decide to sell a 60.7% stake in IDBI Bank, LIC Chairman Siddhartha Mohanty emphasizes the importance of the bancassurance partnership. The move aims to sustain the strong contribution of IDBI Bank to the bancassurance channel, with LIC focusing on shareholder value and strategic collaboration while divesting. The government, holding over 45% in IDBI, and LIC, with a 49.24% share, are set to divest.
Read more lessAditya Birla Group's UltraTech will acquire BK Birla Group's Kesoram Industries' cement business in an all-stock deal valued at approximately INR 7,600 crore, including debt. The transaction grants UltraTech access to two cement manufacturing units in Karnataka and Telangana, enhancing its presence in western and southern markets. UltraTech will issue one share for every 52 of Kesoram, resulting in a 2.2% dilution of its equity capital. The deal's enterprise value includes assuming Kesoram's outstanding debt, and the swap ratio signals a fair valuation, fostering efficiency and profitability. The transaction is subject to regulatory approvals and is expected to close in 9-12 months.
Read more lessBluPine Energy, a subsidiary of Actis, has secured a significant deal, acquiring solar power assets from Acme Group for INR 1,700 crore. The transaction involves 14 special purpose vehicles and adds 312 megawatts of solar capacity to BluPine Energy. Actis, with plans to invest USD 800 million in BluPine, aims to reach a capacity of 4 gigawatts, largely through strategic acquisitions. The move aligns with the Indian government's ambitious target of achieving 500 gigawatts of renewable energy capacity by 2030.
Read more lessFortis Malar Hospitals Ltd is set to sell Chennai's Malar Hospital to MGM Healthcare Pvt Ltd for INR 128 crore. The deal encompasses business operations, land, building, and adjacent parcels. Fortis Healthcare's subsidiaries, Fortis Health Management Ltd and Hospitalia Eastern Pvt Ltd, are part of the divestment. The strategic move is driven by legacy challenges, prompting Fortis to opt for a cash deal. The transaction aligns with MGM Healthcare's expansion strategy in Chennai, bringing its total bed count in the city to around 800 beds and enhancing clinical offerings.
Read more lessJB Chemicals & Pharmaceuticals (JB Pharma), backed by US private equity firm KKR, is actively seeking acquisitions to fortify its position in the domestic branded formulation sector, according to CEO Nikhil Chopra. The company, which invested nearly USD 200 million in recent acquisitions, emphasizes assets with the right valuation and synergy. With confidence in mid-teens revenue growth this fiscal year, JB Pharma focuses on strengthening its chronic portfolio and the contract research and development organization (CDMO) business.
Read more lessAcquisition talks between Reliance Retail and Naturals Salon & Spa have collapsed due to disparities in valuation. Reliance Retail had been negotiating for a 49% stake in Naturals, aiming to enter the growing salon industry. The deal's termination was mutual, attributed to potential synergy mismatches and other preferences. Naturals, with almost 700 outlets, stands among India's top salon chains. Despite the setback, Naturals plans global expansion and is considering capital markets for future growth. Reliance Retail, keen on the salon business, may explore other synergistic acquisitions aligned with its beauty platform Tira.
Read more lessThe National Company Law Appellate Tribunal (NCLAT) has postponed the hearing on Birla Tyres' resolution plan, facing challenges from HDFC Bank, Kesoram Industries, and shareholders. HDFC Bank contests the plan's distribution of shares among financial creditors, while Kesoram questions its exclusion from the list of financial creditors. Shareholder Manav Investment challenges worker compensation in the plan. These appeals, to be heard separately, bear significance for Birla Tyres' future after the Dalmia Bharat Group acquisition, impacting workers' claims and overall business revival.
Read more lessJubilant FoodWorks Ltd (JFL), the operator of Domino's Pizza and Dunkin Donuts, plans to boost its presence by acquiring an additional 51.16% stake in DP Eurasia NV, the exclusive master franchisee of Domino's Pizza in Turkey, Azerbaijan, and Georgia. The deal, valued at INR 670 crore, will be executed through a subsidiary, leveraging a combination of existing term-loan facilities and a new long-term facility. With JFL's current 48.84% stake in DP Eurasia, the move aligns with its strategy to strengthen its hold in the pizza delivery market, including DP Eurasia's coffee brand, COFFY.
Read more lessThe Competition Commission of India (CCI) has granted approval to Atlas 2022 Holdings to raise its stake in Vodafone Group Plc from 14.6% to less than 25%. Atlas, a subsidiary of Emirates Telecommunications Group Company PJSC, plans on-market and off-market transactions for the increase. The move, facilitated by Emirates Telecommunications, based in Abu Dhabi, involves no physical presence in India. Vodafone, headquartered in Newbury, operates in Europe, Africa, and Asia, with Vodafone Idea active in India. The CCI's detailed order will follow soon, marking a strategic development in the telecom sector.
Read more lessBharti Telecom Ltd (BTL), the primary promoter of Bharti Airtel, has increased its ownership in the telecom giant to 39.59%, acquiring an additional 1.35% stake through a substantial INR 8,301.73 crore block deal. The transaction involved the purchase from another promoter entity, Indian Continent Investment Ltd (ICIL), reducing ICIL's stake to 4.56%. With Sunil Mittal's Bharti Enterprises and Singapore Telecommunications holding the majority stakes in BTL, this strategic move strengthens BTL's position in Bharti Airtel amid dynamic changes in the telecom industry.
Read more lessTata Technologies Ltd.'s recent IPO witnessed a historic stock market debut, soaring up to 180% over the issue price. The IPO, oversubscribed by 69.43 times, showcased immense demand, especially from retail and institutional investors. With a price-to-earnings ratio lower than industry peers, Tata Technologies emerged as the most affordable stock in its space. The remarkable listing performance on November 30, coupled with a grey market premium of +392, foreshadows a robust market entry, positioning Tata Technologies as a major player on Dalal Street.
Read more lessTPG Capital-backed Jana Small Finance Bank has received the Securities & Exchange Board of India's approval for its upcoming initial public offering (IPO). The IPO, including a fresh issue ofINR 575 crore in equity shares and an offer for sale of up to 4.05 million shares, positions Jana as the seventh small finance bank to be listed. The funds raised will bolster Jana's tier–1 capital to meet future capital needs. Marked as the fourth largest small finance bank by assets, Jana aims to navigate the IPO market this time after deferring a INR 1,200-crore IPO in 2021.
Read more lessVadodara-based Kronox Lab Sciences Limited has submitted its Draft Offer Document to SEBI for its upcoming initial public offering (IPO). The IPO, featuring a combination of fresh issue and an offer-for-sale by promoters, aims to raise funds for working capital needs and general corporate purposes. Kronox, a manufacturer of high purity fine chemicals, boasts a diverse product portfolio used across pharmaceuticals, biotech, nutraceuticals, and more. With a robust financial performance, including a 24% CAGR in revenue from fiscal 2021 to 2023, Kronox positions itself for listing on the BSE and NSE.
Read more lessZee Entertainment Enterprises (ZEEL) faces hurdles in its merger with Culver Max Entertainment (Sony Pictures Networks India) as regulatory filings reveal INR 176.2 crore merger-related expenses in FY23. While the merger has regulatory approvals, Sony insists on appointing its executive NP Singh as the CEO due to an ongoing Sebi investigation involving ZEEL's current CEO, Punit Goenka. ZEEL settles objections, plans to transfer TV channel licenses to Sony, and records a INR 331.3 crore impairment loss on non-merger assets. A Special Merger Implementation Committee is formed, reflecting ZEEL's strategic moves amidst challenges.
Read more lessThis week's M&A news reflects the dynamic nature of India's corporate landscape, featuring diverse transactions in the Automotive, Home Appliances, Financial Services, Technology, Financial Services, Real Estate, Mining & Metals, Technology, Financial Services, Cement & Building Materials, Energy, Healthcare, Pharmaceuticals, Retail & Beauty, Rubber & Tyres, Energy, Food & Beverage, Telecommunications, Telecommunications, Technology, Financial Services, Chemicals, Media & Entertainment sectors. Stay updated on India's M&A developments as we continue to bring you the latest news and insights.
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