Magazine article Global Finance

Telecom, Technology Deals Fuel Merger Boom in India

Magazine article Global Finance

Telecom, Technology Deals Fuel Merger Boom in India

Article excerpt

India is in the midst of a merger boom, with more than $15 billion of M&A and private-equity transactions in January alone, following a record $60.5 billion worth of such deals for all of last year. The country's political stability, fast-growing economy and a sustained program of economic reforms-including government efforts to attract foreign capital-are among the reasons cited for the feverish pace of takeover activity.

There were 47 M&A deals worth $15.1 billion in January 2018, up from 45 deals worth $2.3 billion in January 2017, according to accounting and consulting firm Grant Thornton. The largest deal this January was state-owned Oil & Natural Gas' $5.8 billion purchase of a controlling stake in Hindustan Petroleum, followed by Reliance Jio's $3.8 billion acquisition of the wireless infrastructure assets of Reliance Communication.

M&A opportunities in 2018 will remain abundant, due in part to the volume of stressed corporate assets on offer at tempting valuations, the Associated Chambers of Commerce and Industry of India said in a recent white paper. "There has been a quantum leap in M&A transactions in India," the paper said.

In April 2017, India amended the Companies Act to permit cross-border takeovers under Indian corporate law. The previous law allowed a foreign company to merge with an Indian company, as long as the domestic company would exercise control, but it did not allow an Indian company to be merged into a foreign company.

The merger of Vodafone India and Idea Cellular to create India's largest telecom operator, worth more than $23 billion, was the country's largest M&A deal of 2017. …

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