NEW DELHI: India Inc's overseas shopping spree has dipped to a four-year low of $27.3 billion so far this year, but a possible acquisition of
LyondellBasell by Reliance Industries would be one of the largest ever by an Indian company, according to deal tracking firm Dealogic.
"Indian acquisitions have dropped to $27.3 billion in 2009 year to date, down 37 per cent compared with the same period last 2008, and the lowest volume since the same period of 2005," it said.
The report says that RIL's $12 billion acquisition bid for the bankrupt petrochemical firm LyondellBasell will be one of the largest acquisitions by an Indian firm abroad.
On Saturday, RIL said it had offered more than $12 billion in cash to acquire a majority stake in the world's third largest petrochemical group LyondellBasell Industries.
"Reliance Industries' bid for LyondellBassell would be the second largest since the Tata Group bought the Corus Group for $13 billion in October 2006," Dealogic said.
If the deal materialises, it would be one of the largest international acquisitions by an Indian company and would create a global energy and chemicals powerhouse.
Cross border acquisitions account for 43 per cent of all Indian acquisitions in 2009 so far. So far this year this is the first major announced overseas acquisition by a domestic firm.
Next in line in terms of acquisition volume after the Tata's Corus deal was by Aditya Birla group firm Hindalco's $6 billion Novellis acquisition.
The other big ticket merger and acquisitions involving an Indian entity include Vodafone's acquisition of Hutch Essar for $10 billion, Ranbaxy's sale to Japan's Daiichi ($4.5 billion), ONGC-Imperial Energy deal ($2.8 billion), NTT DoCoMo-Tata Tele ($2.7 billion), HDFC Bank-Centurion Bank of Punjab ($2.4 billion), Tata Motors-Jaguar Land Rover ($2.3 billion) and Suzlon-RePower ($1.7 billion).
According to global consultancy firm Grant Thornton, at the end of October, the total number of M&As involving an Indian firm stood at 234 deals with an announced value of $7.66 billion, against 405 deals amounting to $27.12 billion during the corresponding period in 2008.
Analysts say the deal would act as a catalyst to drive India Inc's shopping spree and would also give a fillip to the slugging M&A activity in the country.
LyondellBasell last year had $50.7 billion in revenues and employed 15,000 people across 19 countries.
LyondellBasell's American operations and one of its European holding firms filed for bankruptcy protections this year, weighed down by a massive debt and declining demand.
The RIL-LyondellBasell deal may take a few months to conclude. The successful bidder would be decided by the US bankruptcy court.
LyondellBasell's global manufacturing operations cover 61 facilities across 19 countries.
Sourceindiatimes.com
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