Year Ender 2021: Zee-Sony Deal To Tata Buying Back Air India — The Mergers, Acquisitions & Takeovers

This year has witnessed record number of M&A deals; around 80 per cent of the deals were closed in 2020 and 2021, an increase from less than 70 per cent through 2017 to 2019

New Delhi: Mergers and acquisitions (M&As) in India have been at an all-time high in 2021. Starting from start-ups to large conglomerates to MNCs — everyone’s going in for M&A deals.

These deals were mostly led by first-time buyers than ever before, a report titled ‘M&A: Acquiring to Transform’ by Bain & Company suggested. Around 80 per cent of the M&A deals were closed in 2020 and 2021, an increase from less than 70 per cent through 2017 to 2019.

According to the report, an increase in momentum of such deals has been accelerated mostly because of the Covid-19 pandemic. Companies are using M&A deals to transform their business to suit a post-Covid world, the report said, adding that with high cash reserves, increased foreign direct investments (FDIs), and low interest rates, companies are responding to disruptions through acquisitions.

These deals helped the Indian ecosystem witnessing a massive influx of capital in 2021, mostly from abroad.

Indian start-ups have raised approximately $39 billion in 2021, a rise of 255 per cent from $11.8 billion in 2020, according to a news report.

A PWC report showed that large strategic investments or takeovers continued to dominate the deals space in 2021. Corporate and private acquirers have carried on with their pursuit of megadeals and $5-billion deals have already been recorded in this year.

M&A megadeals in sectors such as renewables, infrastructure, and education reflect the continued interest in consolidation.

Private equity (PE) funds have demonstrated their faith in India’s growth story and made long-term investments despite Covid.

The India-centric dry powder has helped PE funds, and established companies with greater liquidity are expected to record more big-ticket deals.

According to a news report, Indian start-ups have raised $39 billion this year (until December 4, 2021), which is a 255 per cent rise from $11.8 billion in 2020.

Key Mergers, Acquisitions, And Takeovers At A Glance

BYJU’s Acquires Aakash Educational Services  

On April 5, Think & Learn Pvt. Ltd, the parent firm of BYJU’s, acquired education company Aakash Educational Services from The Blackstone Group for $1 billion. BYJU’s spent over $2.4 billion this year on acquisitions, including big-ticket ones like Aakash, EPIC, Great Learning and others. This will be the third US-based start-up acquisition by BYJU’s after Osmo and online reading platform EPIC. BYJU’s is likely to go for an IPO in 2022, at a valuation of over $40 billion.

Zomato Acquires Fitso

Indian foodtech platform Zomato acquired full-stack sports facilities provider and discovery start-up Fitso in a deal reportedly worth Rs 80 crore-Rs 100 crore. The deal was first speculated in September 2020, while more details emerged later. This is Zomato’s first big acquisition after UberEats’ India business, which it bought for $350 million (Rs 2,554 crore) in January 2020. It also hints at the company’s strategy of diversifying its revenue streams beyond the core food delivery business and into sports and nutrition, which is Fitso’s forte.

Merger Of Sony and Zee

Sony Pictures Networks India and Zee Entertainment Enterprises on December 22 announced that they have signed definitive agreements for their merger following the conclusion of an exclusive negotiation period during which both parties conducted mutual due diligence. Sony would invest $1.575 billion and hold 52.93 per cent stake in the merged entity, while Zee would hold the remaining 47.07 per cent.

Tata Group’s Air India Acquisition

The Centre has signed a share purchase agreement with Tata Sons for sale of national carrier Air India for Rs 18,000 crore. Earlier in October, the government had accepted an offer by Talace Pvt. Ltd., a unit of the holding company of Tata Group, to pay Rs 2,700 crore cash and take over Rs 15,300 crore of the airline’s debt. According to a statement, the Tatas will own a 100 per cent stake in Air India as also 100 per cent in its subsidiary Air India Express and 50 per cent in the joint venture Air India SATS (airport services on ground and cargo handling). The total permanent and contractual employee strength of Air India and AIXL is 13,500.

Adani Green Buys SB Energy

Adani Green Energy closed India’s largest renewables M&A deal for $3.5 billion — a 46 per cent increase in operational capacity. SB Energy India is now a 100 per cent subsidiary of Adani Green Energy.

Wirpo Acquires Consultancy Firm Capco

Wipro, a leading global information technology, consulting, and business process services firm, signed an agreement to acquire Capco, a global management and technology consultancy providing digital, consulting and technology services to financial institutions in the Americas, Europe, and the Asia-Pacific for $1.45 billion. London-headquartered Capco’s clients include many marquee names in the global financial services industry.

Acquisition Of Gangavaram Port By Adani Ports

The Adani Ports and Special Economic Zone has acquired 58.1 per cent stake held by DVS Raju and family in Gangavaram Port Limited. The deal is valued at Rs 3,604 crore and subject to regulatory approvals. Adani Ports had announced acquisition of Warburg Pincus’s 31.5 per cent stake in Gangavaram Port on March 3, 2021 and together with this acquisition, Adani Ports would have 89.6 per cent stake in Gangavaram Port Limited. Gangavaram Port, which is located next to Vizag Port, is the second-largest non-major port in Andhra Pradesh with a 64 MMT capacity established under concession from the Government of Andhra Pradesh that extends till 2059.

IndiGrid Buys NER-II Transmission

IndiGrid in March completed the acquisition of NER-II Transmission from Sterlite Power at an enterprise value of Rs 4,625 crore. India Grid Trust (IndiGrid) is the country’s first and the largest power sector Infrastructure Investment Trust (InvIT). With this acquisition, IndiGrid’s Asset Under Management (AUM) increased 34 per cent to Rs 20,000 crore.

Mahindra Logistics Acquires Meru Mobility Tech

Third-party logistics solution provider Mahindra Logistics has acquired 100 per cent equity share capital of Meru Mobility Tech Private Limited, V-Link Fleet Solutions Private Limited, and V-Link Automotive Services Private Limited from Meru Travel Solutions Private Limited, Mahindra Logistics said. The total combined deal size is Rs 100.9 crore.