28 Nov 2014

Lot of M&A

Last week we saw a record number of transactions in the M&A field with seven deals announced worth around $4.5bn. Leading the way was our holding Kotak Mahindra Bank which is to acquire ING Vysia Bank in an all-stock deal worth $2.4bn, paying 750 shares for every 1,000 of ING Vysia. This is the biggest transaction ever in India’s banking sector and is seen as the forerunner of other transactions to come as the sector consolidates. The share prices of other potential target banks in the private sector rose sharply in response. Also, State Bank of India drew interest as it is expected to merge with five of its state-bank associates. Other transaction were announced in IT where Tech Mahindra acquired a US telecom network service provider, in FMCG where Future Group acquired a convenience-store chain and in the Power sector, where JSW Power acquired two hydro-electric units of JP associates for $1.6bn. Overall, the value of the transactions announced this week has brought the total value of Indian M&A in 2014 above the aggregate of $22.3bn in value in 2013.

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