Recent media overtures about India as an important economic power have become a daily affair. Every day some exciting news or report keeps on appearing somewhere or the other in media that confirms the inference such as India has arrived or India matters. Recent news about the two acquisition deals has made India’s presence known globally. And both these deals are big and being fought well too.
Tata Steel had already grabbed Corus, but Brazil’s CSN suddenly appeared on the scene as villain with higher bid and Tata had to improve on its bid value. The battle is still on and the whole business world is watching the final result. In Arcelor acquisition by Mittal Steel, as reported India’s Prime Minister and Commerce Minister had tried to help Mittal morally by talking in media. However, I have not come across any lobbying by the government for Tata-Corus deal. Reason is not known.
Another story is equally interesting and significant that is making splashes in business circle in India. It relates Hutchinson Essar, India’s fourth-largest mobile operator. Hutchison Telecom, which Li Ka-shing, Hong Kong’s richest tycoon and a fabled dealmaker controls, has put up for sale its 67% stake in Hutchison Essar. It is another big deal under bidding game that is being played by the biggies including Vodafone. Vodafone, Reliance Comm, Ruias, and even Hindujas are in fray. And as per some speculations, the deal may go over $20 billion.
Vodafone CEO Arun Sarin, the master strategist has visited Delhi meeting government ministers as well as discussing with prospective partners. Sarin is open for Ruias as well as Anil Ambani as partner.
Chairman Anil Ambani of Reliance Communications, India’s second largest mobile phone company is also busy doing all needed to grab the deal including lobbying with government officials and ministers. The ambitions of Anil Ambani are known to the competition. He will do everything to win.
Vodafone appears to be the front-runner. Vodafone last week reportedly valued all of Hutchison Essar Ltd at between US$17 billion (euro13 billion) and US$18 billion (euro13 billion), which would make it the biggest-ever corporate takeover in Indian history.
The final outcome of both the deals will be quite significant. As known, if Tata Steel wins Corus ultimately, it will become the fifth largest steel company f the world. And with a win, Reliance Communications will become the biggest mobile operator of India.
Could any one think of a deal of this value in India’s telecom sector happening ten years ago?
And I am completing this writeup; I read the possibilities of two more acquisitions by the two India big business houses.
1.Reliance Industries is likely to bid for General Electric’s plastics business that is expected to be put on the block. The deal may be priced at nearly $10 billion.
2.The Aditya Birla group is seen in race for a unit of Canada-based aluminium major Alcan. The proposed bid would be part of the company’s ambitious plans to become one of the top 10 aluminium producers globally over five to six years. It is estimated that it would carry a price tag of over $8 billion.
Has not India become a happening place?