Earnings blow fails to deter M&A flow for Corporate India

Fall in stock markets, coupled with earnings downgrade, by various brokerage firms doesn’t seem to be scaring off Corporate India as they continue with their mergers and acquisition and private equity plans. Firspost did a quick analysis of some of the deals announced between 16 August to 25 August 2011 and came up with the following :

[caption id=“attachment_70329” align=“alignleft” width=“380” caption=“The deals analysed were announced between 16 August to 25 August 2011. AFP”]  [/caption]

•NMDC, one of India’s top cash-rich companies and the largest mining company, is all set to acquire a 50 percent stake in Australian-based Legacy Iron Ore, reported a local media house. The cost of the deal is estimated at around $100 million. Legacy is expected to have two iron ore projects in Australia with an estimated reserve of over 130 million tonnes. The company is also into gold and manganese mining with plans to foray into coal mining. To read more, click here.

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•GVK Power & Infrastructure is planning to acquire two coal mines in Australia for around $2.2 billion (Rs9,900 crore). The company expects to pay $1.3 billion for Alpha Coal and Kevin’s Corner mines and another $900 million to develop its logistics infrastructure, reported a local media source.

Earlier, it acquired an additional 14 percent stake in Bangalore International Airport for Rs 614 crore from German firm Siemens Project Ventures, thereby increasing its total holding to 43 percent. With this acquisition, it becomes the largest single shareholder in the company. In 2009, it had acquired a 17 percent stake in BIAL from Larsen and Turbo (L&T) for Rs 686 crore and a 12 percent stake from Zurich for Rs484.6 crore. To read more, click here.

•Aventis Pharma, a unit of drugmaker Sanofi, has entered into an agreement to acquire Universal Medicare’s marketing and distribution business in India. The deal is expected to be completed by the fourth quarter of 2011 and is pegged to be around Rs 500 crore, according to media sources. The Mumbai-based Universal Mediacare makes a number of OTC products to treat osteoporosis and arthritis. To read more, click here.

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•Hotel Leela is selling its 5-star hotel in Kerala (Kovalam) for Rs 500 crore to non-resident Indian industrialist, B Ravi Pillai, who owns Travancore Enterprises. Hotel Leela will transfer the hotel property to a subsidiary in the first leg of the transaction and then, sell the subsidiary to Travancore Enterprise. While the property belongs to the new company, it will continue to be called ‘The Leela’ and will also be managed by Leelaventure. This deal will come as a life saver for the company as it is reeling under high debt (Rs3800 crore). The company also reported a loss for the June 2011 quarter owing to higher interest and depreciation expenses. To read more, click here.

•Kyocera Mita, a subsidiary of the $12 billion Japanese Kyocera Group, acquired the copier division of Kilburn Office Automation Ltd. According to Wall Street view, this acquisition is expected to be worth more than 1 billion Yen (Rs58 crore). While this acquisition will give Kyocera direct exposure in 15 cities, it will also ramp up its employee base to 200. To read more, click here.

•NIIT Technologies acquired the Madrid-based software service firm Proyecta Sistemas de Informacion for $7 million. The company expects this acquisition to enhance its European footprint as it will give them a wider presence in Europe. The acquired company reported revenues of $10 million and offers IT services in tourism, airlines and BFSI segments. To know more, click here.