M&A Critique - November 2019

M&A Activity in India this year has seen a steep fall from it’s highest in 2018. Cross-Border M&As have seen the biggest fall and eventhough we have 2 months left in this year, the deals won’t pick up. This lull seems to be created with a cautious approach not only by our industry leaders but also foreign companies with so many changes are happening and in pipeline initiated and announced by the new old government. Going ahead, M&A in India should pick and hopefully the extended monsoons don’t cast a bigger cloud on our country’s biggest sector in terms of livelihood dependency. Maybe a stirring up the economy too is in the offing.

Vardhman Textiles is one of the oldest group in India related to manufacturing of yarns and threads and over the years it has become one of the most vertical integrated with series of acquisitions and joint ventures thus creating associate and subsidiaries in similar business. So it would make sense to consolidate some of the business going ahead. In this cover article, we look at the structure of the company and it plan to merger its 3 wholly owned subsidiaries and one listed associate company into itself thus not only simplifying the corporate structure but also increasing it overall liquidity.

Currently, an issue in Jet Airways Insolvency Case that is critically being debated in the National Company Law Appellate Tribunal (“NCLAT”) is regarding the question of jurisdiction of the bankruptcy court in Netherlands to try matters as well as pass orders of a company registered and incorporated in India. Cross-border insolvency issue has come in light which appeals for an amendment in the Insolvency & Bankruptcy Code. We look at the updates in this case.

The Hinduja Group restructured its media and communication business which will enable the group to expand its digital offerings in the rural market and reach of the group’s entire product portfolio to smaller towns and cities. In this article we look at the past transactions done by Hinduja Ventures Ltd and its recent scheme of demerger announced by its board to  approve integration of IndusInd Media and Communications (IMCL – demerged company) with Hinduja Ventures Ltd.

Total SA, a French company, is the world  energy  giant  and has chartered a plan to invest as much as $18 billion  to acquire assets in energy including green and renewable sources. As a part of this plan it has entered into an agreement for stake purchase of 37.4% of Adani Gas Limited through a tender offer to public shareholders to acquire up to 25.2% shares subject to applicable regulations and purchase the residual shares from Adani Family.

Mangalam Timber Products Ltd. (MTPL) and Mangalam Cements Ltd. (MCL) are both managed by B.K. Birla Group having different products and consumer sections. Albeit no apparent synergies can come of merger of the companies, the board of both the companies have approved a scheme of amalgamation of the MTPL into MCL. In the article we look at the valuation and possible reasons for such a merger.

Alongwith Regular Features…..