Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: VAT RATES :: empanelment :: cpt :: TDS :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: form 3cd :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment
 
 
« Mergers and Acquisitions »
  IBBI pitches for market driven mechanism for mergers, acquisitions
 Air India disinvestment: Govt invites applications from investment bankers, law firms
 Govt seeks advisers for Air India disinvestment
 India Inc's M&A value dips 46 percent in August: Grant Thornton
 Deals of the day-Mergers and acquisitions Sep 12, 2017,
 Deals of the day-Mergers and acquisitions Sep 5, 2017
 Nationalised Banks Exempted From CCI Approval For Mergers
 Deals of the day- Mergers and acquisitions Aug 29, 2017,
  NCLT process will cleanse the system; another Swachh India in the making
 Understanding Mergers & Acquisitions in India
 Acme, Inox explore exit from renewable energy projects won at record low tariffs

M&A deals worth $13 bn
September, 08th 2010

In a year that mergers and acquisitions (M&A) in India have hit a record, aborted deals are also fast catching up.

Differences over valuation, the inability of merger partners to arrange funds and regulatory issues have scuppered 27 inbound deals worth about $9.5 billion plus five outbound M&A transactions valued at $3.5 billion.

This year, Indian firms have sealed as many as 162 deals abroad worth about $24 billion (`112,000 crore) and about 849 inbound transactions worth about $55 billion (`256,800 crore) where an Indian firm was the target. In total deal value, this is an all-time high, according to Dealogic Ltd, a London-based market research firm that collects and analyses deal-related data.

On Monday, the proposal to create the countrys second largest telecom transmission network by combining the cellphone towers of Reliance Communications Ltd (RCom) and GTL Infrastructure Ltd became the 27th deal to fall through in 2010. GTL Infra had proposed to merge Reliance Infratel Ltd, the cellphone towers arm of RCom, with itself to form an entity with around 80,000 towers and an enterprise value of `50,000 crore. Neither firm explained why the deal collapsed.

In April, a deal by US-based Abbott Laboratories to purchase Wockhardt Ltds nutrition business had fallen through due to a dispute. The tussle pertained to Wockhardts repayment terms for certain liabilities to its overseas banks and foreign currency convertible bondholders.

Abbott said in a statement that the decision was prompted by Wockhardts inability to resolve debt restructuring issues with some of its lenders.

Investment bankers and multinational consultancies that advise firms on M&A deals say valuation mismatches or the inability to tie up required funds are among the primary reasons for deals falling through.

(The deal) market is peaking and there is a spiralling increase in price. Even within six months there are significant differences in valuation expectations, said Girish Vanvari, executive director, M&A tax, at the Indian arm of multinational consultancy KPMG. Companies are looking for ways out.

In 2009, 37 deals fell through, of which 26 were inbound and 11 outbound. Differences in expectations of valuations manifest in two ways, one where there are differences between parties to a proposed deal or where a different bidder steps in and offers higher value, said C.G. Srividya, partner, specialist advisory services, at global consultancy Grant Thornton LLP.

The inability of the acquirer to tie up sufficient funds is also known to throw deals off rails.

Some deals fall through due to lack of financing and this had happened around the downturn (also), said Navin Wadhwani, managing director, NM Rothschild and Sons Pvt. Ltd. But expectations of buyer and the seller change and therefore, they would renegotiating at a later point of time.

Sometimes, firms rush into announcing deals out of varying compulsions and that may lead to some of the deals being called off later at the due diligence stage, experts say.

Sometimes firms are in a hurry to announce because of market compulsions, says Venkat Subramanyam, founder-director Chennai-based investment bank Veda Corporate Advisors Pvt. Ltd. As a result, there is not enough due diligence and since the foundations are not strong, the deal is bound to fall apart.

In some cases, the deal is already out in the public domain, so firms have to announce that such a thing is happening subject to conditions, NM Rothschild & Sons Wadhwani said. We advise our clients not to announce the deal till it has reached a firm stage.

Irrespective of deals that are falling through, the overall deal market is still vibrant and continues to gather pace.

Anybody who is not in India wants to get a foothold, Vanvari said. Both in terms of volume and value of deals, the market continues to gather momentum.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
System Testing Solution Manual Software Testing Solutions Automation Software Testing Solutions System Workflow Testing System Manual Testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions