Mergers & Acquisitions

Mergers and acquisitions are a foreign direct investment entry mode, Multinationals use these methods to entering new markets.

The Bharti-Zain Case:

Bharti’s $10.7 billion acquisition of Kuwait-based Zain’s African assets was the second largest deal by an Indian company after Tata Steel snapped one with Anglo Dutch steel maker Corus for about $12 billion in 2007.(Livemint.com, 2010)

The Bharti-Zain is the largest deal in terms of volume in BRIC region so far in 2010, the Dealogic data showed. (Livemint.com, 2010)

We can understand here that an acquisition is a process in which one company takes over the other. a simple way to describe it is when you buy a car that is property from a selling company, once you buy it you will control it and follow your objectives through its capabilities and yours united.

Now that we know what and acquisition is, let's proceed and explain what a merger is. A merger is when to companies unite themselves to create a new company and pursue the company's interests.

A simple way to describe it would be; when two or more persons unite themselves to achieve a goal. Making it simple, when you go and play Fifa(soccer Video Game) and 4 persons will play by composing two teams controlled each by two persons and compete against each other to win the match.

Big deals in India:

- Bharti Airtel Ltd. agreed to acquire the African operations of Zain Africa BV for USD 10.7 billion (INR 493.56 billion).

- GTL Infrastructure Ltd. acquired tower assets of Aircel Ltd. for USD 1.8 billion (INR 84 billion).

- Fortis Healthcare Ltd. acquired a 23.9% stake in Singapore-based Parkway Holdings Ltd. from TPG Capital for about USD 685.3 million (INR 31.10 billion).

- Essar Group agreed buy Trinity Coal Corp. for about USD 600 million (INR 27.47 billion) from Denham Capital Management LP.

- Telenor ASA acquired a 7.15% stake in Unitech Wireless Ltd. for USD 433.36 million (INR 20.22 billion). (They have named their mobile services in India Uninor.)

References:

- Livemint.com. (2010, june 27). Livemint.com. Retrieved october 25, 2010, from Indian M&A volume spikes to record $48.6 bn this year: http://www.livemint.com/2010/06/27133056/Indian-MampA-volume-spikes-t.html

- Indonesiancoal.com. (2010, August 16). Indonesiancoal.com. Retrieved october 25, 2010, from FOCUS: India’s M&A in 2010:http://indonesiancoal.com/article/focus-indias-ma-in-2010.html

Images:

- http://miltondawis.com/images/merger.jpg

- https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqgSPcYpZ4nSkfob_QA2MmXzOkIm3BAlvX_U_VyfJIIAsDMZHJYM_HHT_k36BeFMYHxeSUy0YpxFMLDmo8atJeHnkHGYFUPXSHPGwxItGtFTliE0bFgk_QkvJdi_QQ6y8tkgzoqsatZuf9/