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Behind the deals and deal-makers
Reliance aims big with $12 bln bid for LyondellBasell
Ranked by Forbes as India’s richest man with a net worth of $32 billion, Mukesh Ambani is no stranger to taking risks.
The move by conglomerate Reliance Industries, controlled by Ambani, to bid for bankrupt LyondellBasell is a calculated one. Markets seem to think this is a bargain and investors pushed up Reliance’s stock nearly 4 percent on Monday.
If the deal, which sources say may be worth $12 billion, goes through, it would catapult Reliance into the ranks of top petrochemical makers such as Saudi Arabia’s SABIC, Germany’s BASF and Dow Chemical Co.
The bid comes at a time when asset prices have fallen globally in the wake of the economic crisis but there are still some lingering doubts over whether the worst is over for the global economy.
Is the worst over?
Merger mania is back, at least that’s what the numbers seem to show.
A staggering total of about $60 billion worth of corporate deals have been announced or rumoured in global markets since Saturday alone. The takeover feast is impressive, spread as it is across diverse sectors such as foods, semiconductors, financials and telecoms.
Kraft Foods’s blockbuster $16.7 billion offer to buy Cadbury has suddenly turned the spotlight back to dealmaking and swept away markets’ lingering concerns of patchy economic growth. The rising deal volume is a welcome relief for investment banks, who’ve gone through a torrid year after Lehman’s bankruptcy last September brought M&A to a halt. The dealmaking will help them partly fill their coffers with much-needed advisory fees and a kick up in the league tables.
No doubt with many equity markets rallying to 2009 highs, and lured by prospects of improved valuations, many buyers are chasing deals while prices are seen as cheap. That could have been the thinking behind Abu Dhabi’s move to offer $1.8 billion to buy loss-making Nasdaq-listed, Singapore-based Chartered Semiconductor in a chip sector emerging from its worst downturn.
No bruised egos as Bharti-MTN redial once again
Exactly one year ago, squabbles over control forced Bharti Airtel and MTN to ditch their hope of forming a global telecoms group, but both emerging markets-focused companies are back on the negotiating table to thrash out a $61 billion merger.
What’s changed?
For a start, both firms are now publicly talking about a detailed structure for the combined entity, something that was missing last time.
As part of an initial deal worth more than $23 billion unveiled on Monday, Bharti will pay in cash and shares for 49 percent of MTN, while MTN pays cash and stock for an effective 36 percent stake in the Indian firm. Previous merger talks collapsed when the South African firm proposed a new structure that would have seen Bharti become an MTN unit.
from India: A billion aspirations:
Dark horse Tech Mahindra wins race to acquire Satyam
Tech Mahindra, part of Indian business group Mahindra & Mahindra, won the race to acquire Satyam Computer Services on Monday, in a deal that'll help the mid-sized outsourcer gain in size and also lift clarity on Satyam's fate.
In a race that saw only a handful of bidders, Tech Mahindra beat rivals such as engineering conglomerate Larsen & Toubro and U.S.-listed Cognizant Technologies. Tech Mahindra agreed to buy a 31 percent stake in Satyam at 58 rupees, a 23 percent premium to Satyam’s last closing price.
(Click here to watch a Reuters Insight video)
Tech Mahindra, established more than 20 years ago as a joint venture between Mahindra & Mahindra and British Telecom, faces the daunting task of reshaping Satyam, a company at the heart of India's biggest corporate scandal.
There is one Proverb in English – ” Ends Well All Well”. Might be it fit for Satyam but is it really done cause of Govt efforts i defer from this view. Well In fact Govt is some how support Mr. Raju and others to do such things which leads to a debacle, So finally who get the credit for this of course its IT industry and corporate who act with will to safeguard the interest of SATYAM IT industries and Indian corporate image. Its his will power that company not sold to L&T just on basis of merit of share holding but on merit of true vision and ability to handle the business. In true sense again our corporate prove that with true determination even corruptest system can be clean and make it on track to work.
And the most admirable point which mention in one newspaper that still SATYAM web page gives you a company picture not like Lehman or Enron where u find only buried souls finding their way to salvation.
from India: A billion aspirations:
Fraud-hit Satyam pins hopes on shaky white knights
Three months after its founder Ramalinga Raju shocked markets by disclosing India’s biggest corporate scandal, Satyam Computer Services is desperately pinning its survival hopes on its auction set for April 13.
But only a handful of bidders are in the race due to lack of clarity over Satyam’s accounts and potential legal liabilities from U.S. lawsuits. Even if the company manages to find a buyer for a 51 percent stake, it’ll take a long time to instill confidence among employees already jumping shipand nervous clients.
What about the role of the government, whose appointed-board is due to choose the buyer the same week the country heads for national elections? Will the government remove its handpicked board or continue to keep a watchful eye on any new strategy chalked out by the new buyer?
Some finance industry players point out the similarity between Satyam’s deal and the deal for top Chinese electronics retailer GOME. The Chinese company is in talks with potential investors, while its founder and ex-chairman is under potential police investigation. There is a lot of uncertainty about both deals and government support, temporary or long-term, is key to shoring up both high-profile firms.
Hanmi
Agree with you, YSRajasekhar Reddys congress and before that TDP have allowed Raju brothers to doctor books and to venture into real estate business by flouting the law and in the bargain collected multiple crores for themselves.
If congress is oozing crores of rupees today and ready to spend the illegal money for election victory then the very democratic credentials of the country should be questioned. Last week, Rajasekhar reddys son in law, brother anil, was arrested for using andhra churches for election propaganda and also for distributing money in churches. Where is the sanity whats judiciary doing, is the law enforcement sleeping or is it in denial.
As for satyam,it will limp back to life and takes sometime to bounce back to previous glory. Cutting costs is of paramount immediate strategy.
from India: A billion aspirations:
Satyam — truth be damned?
If a stock dives 55 percent, is it time to go bargain hunting?
Absolutely not! At least that was the case with India's Satyam Computer Services after it shocked investors on Wednesday by disclosing most of its profits were cooked up.
The disclosure came after the company's botched attempt last month to buy two construction firms partly owned by its founders, which sent its shares diving 55 percent in one session by angry investors.
Chairman Ramalinga Raju said: "It was like riding a tiger, not knowing how to get off without being eaten."
Satyam was,is and will remain one of the TOP company no matter what happens .The SPIRIT OF SATYAM is very high, all the EMPLOYEES AND LEADERS are united and stand by Satyam and will do their BEST to come out of it.
ALL THE BEST FOR SATYAM 
from India: A billion aspirations:
It’s “all in the family” for Indian tech firm
Hold on to cash and don't jump in to help family-owned firms.
Satyam Computer Services got this stern message this week when it was forced to dump a plan to spend $1.6 billion to buy two builders, part-owned by Satyam's chairman and other insiders.
Ramalinga Raju, chairman, Satyam Computer Services is seen in his office in Hyderabad in this undated handout photograph. REUTERS/Handout
The move sent shockwaves across a country known for its trailblazing software industry, and triggered a cloud over corporate governance in India.
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I think Airtel has done it right.
In fact this will be the biggest deal !!