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Acquisitions of 2021 that made Headlines
Over the years, Mergers and Acquisitions (M&A) have become one of the most beneficial strategies in the world of business. In the Indian subcontinent, taking over another business has happened very frequently. The purpose of such an M&A revolves around a company's long-term growth strategy, such as increasing market share, geographical outreach, reducing competition, profit from patents, or even entering new sectors or product lines. Companies often make required use of other underperforming companies or governments looking to disinvest.
As per a report by financial markets tracker Refinitiv, merger and acquisition (M&A) activity in India touched a three-year high, with deals worth $90.4 billion hits in the first nine months of 2021, a 35.1% increase compared to those in the first nine months to the same period a year ago.
Mergers and acquisition (M&A) deals in India are on the verge of an all-time high as first-time buyers, especially startups, drive deal volume valued at an upward of $75 million.
According to a report by Bain and Company, the number of such deals is likely to touch 85 this calendar year with first-time buyers accounting for almost 80% of them. Unlike in 2017-2019, when mega deals – valued at $5 billion or more – comprised a majority of deal activity in India, the last two years have seen heightened activity in mid-sized deals. Here we'll take a look at the some of the significant Mergers and Acquisitions in India-2021.
Revival of Air India
On October 8, after a gap of 68 years, debt-laden national carrier Air India handed back to its founders Tata Sons, concluded a decades-long struggle to offload the money-losing flag carrier. The salt-to-software conglomerate set a winning bid of Rs 18,000 crores reacquire the airline more than half a century after it yielded control to the Centre. The winning bid of Tata Sons for Air India was more than the government's reserve price of Rs 12,906 crore.
Similarly, the Tata Group is actively reshaping its portfolio and has done over 20 deals in the last two years, consisting of multiple acquisitions such as BigBasket and 1mg to build its super-app.
Reliance signs green loans to fund REC Solar acquisition
On December 6, Reliance Industries Ltd (RIL) has inked a $736 million-equivalent green loan to fund its acquisition of Norwegian solar panel manufacturer REC Solar Holdings, marking it as the first such financing for the Indian conglomerate.
RIL disclosed its plan to use REC Solar's industry-leading technology in its fully integrated, metallic silicon to PV panel manufacturing Giga factory at Dhirubhai Ambani Green Energy Giga Complex, Jamnagar, primarily beginning with 4GW per annum capacity and eventually growing to 10GW per annum. The green financing is the only loan from RIL so far this year.
Reliance has been aggressively growing its emerging businesses through M&A with recent acquisitions in retail, digital, and renewables segments.
Byju's acquires Aakash Educational Services
On April 5, Ed-tech major Byju's proclaimed the acquisition of Aakash Educational Services Ltd (AESL) for around $1 billion. It is Byju's biggest acquisition to date in India's burgeoning ed-tech space. Byju's considered the deal a strategic partnership with AESL, a leader in test-prep services.
The acquisition aims to provide education to students at a much larger scale with multiple delivery channels that can be innovated out of both ecosystems (online and offline). Byju's would make further investments to accelerate Aakash's growth.
Sony, Zee to merge into a blockbuster unit
Zee Entertainment Enterprises Limited (ZEEL) and Sony Pictures Networks India (SPNI), two of India's most prominent media firms, took their first steps towards a multibillion-dollar merger. The agreement possesses the potential to brand the newly created company, one of the country's largest and most sought after. Sony Pictures Entertainment would invest $1.575 billion in the newly consolidated firm as part of the acquisition. The two parties agreed to ink a non-compete agreement.
Ola acquires geospatial firm GeoSpoc
On October 6, Ola moved to acquire geospatial services provider GeoSpoc. The vision of the acquisition is to build the next generation of location technology, including real-time, three-dimensional, and vector maps.
As part of the Ola-GeoSpoc acquisition deal, CEO Dhruva Rajan and his team of geospatial scientists and engineers would join the ride-hailing startup to develop technologies.
Nykaa acquires skincare brand Dot & Key
Beauty and fashion e-commerce platform Nykaa on October 22 claimed the acquisition of homegrown skincare brand Dot & Key, making it the first direct-to-consumer (D2C) beauty brand acquired by the soon-to-be listed company. As per the investment, Dot & Key would join Nykaa's stable of owned brands, the company said in a statement.
upGrad unites its three India subsidiaries into one unit
On Nov 25, upGrad has announced consolidation of its three Indian subsidiaries—upGrad Campus, upGrad Jeet and upGrad KnowledgeHut—to create one parent company in India, at a time when the wider edtech segment of the country is witnessing significant agitate.
The merged entity would target to cover the entire gamut of higher educational technology offerings, catering to college learners and working professionals. upGrad intends to achieve 7.5 million registered users by 2024 by collaborating with over 1,298 universities, 3,110 corporates and expanding its network of faculty, mentors and experts to 11,078.Presently, it has over 300 university partnerships with over two million registered users across 50 countries.
Nazara Technologies intends expansion in US, Europe
On October 12, Gaming and sports media company, Nazara Technologies has taken one more step towards its acquisition process. The firm has lately secured about Rs 315 crore to accelerate its acquisition strategy, has cast its net as far as the United States and Europe.
Nazara, which has actively been scouting and acquiring companies over the last five years, is now looking to fill some gaps in its casual, social multiplayer, e-sports and real money gaming sectors.
“We are looking at expanding our M&A team outside India. All our M&A has broadly happened in India because we are a product of the Indian ecosystem,” stated chief executive Manish Agarwal. “We want to really kind of expand our M&A into Europe and US, especially in the mobile gaming space because that's where you have a long history of game development in Europe for 40 years versus India for four-five years.”
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