GLOBAL ACQUISITIONS: THE INDIA STORY
CHRIS PARSONS
CHAIRMAN, INDIA PRACTICE, HERBERT SMITH FREEHILLS
December 2013
INDIA’S ACQUISITIONS OVERSEAS – 112 COUNTRIES
SINCE 2003
Source: Thomson Reuters, August 2013
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TARGET NATIONS
BY NUMBER OF DEALS (2003-13)
600
500
No. of deals
400
300
200
100
0
US
UK
Australia
Germany Singapore
Canada
Indonesia
Italy
France
UAE
South
Africa
Source: Thomson Reuters, September 2013
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TARGET NATIONS
BY VALUE (2003-13)
30
Value of deals (US$bn)
25
20
15
10
5
0
US
UK
Nigeria
Australia
Venezuela Singapore
Canada
Bermuda Mozambique
Turkey
Germany
Source: Thomson Reuters, September 2013
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TARGET SECTORS
BY NUMBER OF DEALS (2003-13)
450
400
350
No. of deals
300
250
200
150
100
50
0
High Tech
Mining &
Materials
Consumer
Industrials
Healthcare
Energy &
Power
Financials
Media &
Telecoms
Entertainment
Source: Thomson Reuters, September 2013
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TARGET SECTORS
BY VALUE (2003-13)
40
35
Value of deals (US$bn)
30
25
20
15
10
5
0
Mining &
Materials
Energy &
Power
Industrials
Telecoms
Consumer
High Tech
Healthcare
Media &
Financials
Entertainment
Real Estate
Source: Thomson Reuters, September 2013
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TOP 15 OUTBOUND CROSS-BORDER DEALS (2003-13)
Year
Indian bidder
Target
Target sector
Target’s nation
Value
(US$m)
2006
Tata Steel
Corus Group
Metals & Mining
UK
12,695
2010
Bharti Airtel
Zain Africa
Telecoms
Nigeria
10,700
2007
Hindalco Industries
Novelis
Metals & Mining
Canada
5,767
2010
ONGC, Repsol, Petronas, Indian Oil Carabobo
Oil & Gas
Venezuela
4,848
2008
ONGC Videsh
Imperial Energy
Oil & Gas
UK
2,859
2010
Adani Enterprises
Galilee Basin Coal
Metals & Mining
Australia
2,739
2013
ONGC Videsh & Oil India
Videocon Group
Oil & Gas
Mozambique
2,640
2013
Apollo Tyres
Cooper Tire & Rubber
Automobiles & Components
US
2,356
2008
Tata Motors
Jaguar Land Rover
Automobiles
UK
2,300
2011
Adani Enterprises
Abbot Point Coal Terminal
Transportation & Infrastructure
Australia
1,950
2010
Reliance Industries
Atlas Energy – Marcellus
Oil & Gas
US
1,700
2008
Suzlon Energy
REpower Systems
Machinery
Germany
1,700
2007
Essar Group
Algoma Steel
Metals & Mining
Canada
1,467
2007
Tata Sons
Kaltim Prima Coal
Metals & Mining
Indonesia
1,300
2011
GVK Power & Infrastructure
Hancock Coal-Queensland Coal
Metals & Mining
Australia
1,260
Source: Thomson Reuters, September 2013
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A SNAPSHOT
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CASE STUDY ONE:
TATA STEEL AND CORUS
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PUBLIC COMPANY TAKEOVER-OFFER
(recommended or hostile)
Takeover offer
Shareholders
Purchaser
Transfer shares
Target company
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PUBLIC COMPANY TAKEOVER-SCHEME
Shareholders
Purchaser
75% shareholder vote
Transfer/issue of shares
Target company
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OVERVIEW
• Acquisition of Corus Group plc by Tata Steel for US$12.6bn
• Takeover effected by scheme of arrangement
• Competing bid from a Brazilian steel company, Companhia Siderúrgica Nacional
(CSN)
• Competition culminated in an auction on 30 January 2007
• Largest ever outward investment by an India-based company
• Creates the world’s fifth largest steel company
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TATA STEEL/CORUS TIMETABLE
Date
Event
5 Oct 2006
Tata Steel announces interest after media speculation
20 Oct
Tata Steel announces offer at 455 pence
10 Nov
Tata Steel posts Scheme document (documents on display)
17 Nov
CSN announces possible offer at 475 pence (virtual bid)
4 Dec
Court meeting & EGM adjourned until 20 Dec
10 Dec (Sunday)
Tata Steel pre-emptively increases its offer to 500 pence
11 Dec
CSN announces pre-conditional offer at 515 pence
19 Dec
Panel announces that if there is still a competitive situation on 30 Jan
it will conduct an auction
30 Jan 2007
Auction started at 4.30 pm and concluded in early hours on 31 Jan
31 Jan
Winning Tata offer of 608 pence and losing CSN offer of 603 pence
announced
2 Apr
Scheme effective date
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CORUS SHARE PRICE
650
600
550
Tata 455 offer
announced
CSN 515 offer
announced
500
Tata 500 offer
announced
450
400
Tata interest
announced
Tata 608 and
CSN 603 offers
announced
CSN possible
475 offer
350
2006
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2007
15
PUBLIC AUCTIONS
• The Panel announced that it would implement an auction if
CSN and Tata had not announced final offers by 30 January 2007
• The timetable was consistent with the principle that a Target should not be
subject to bid speculation for an unduly long period
• The Panel has used its power to conduct auctions three times in the past.
All of these have been 3-5 days long
• This is the first time the Panel has conducted an auction over such a short
period (less than eight hours) and the first time that formula bids have been
permitted
• Eight rounds of fixed price bidding with 5 pence minimum increments
• Ninth round of formula bidding: each bidder submitted its maximum price and
differential above the highest bid of the other bidder which it was willing to pay
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CASE STUDY TWO:
TATA MOTORS AND JAGUAR LAND ROVER
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COUNTRIES INVOLVED
Canada
Ford in US (Seller)
France
Ireland
Mexico
Latin
America
Brazil
Argentina
GLOBAL ACQUISITIONS | THE INDIA STORY
UK
Belgium
Norway
Sweden
Netherlands
Germany
Austria
South
Africa
Spain
Portugal
Middle
East &
North
Africa
SubSaharan
Africa
Italy
Tata in India (Buyer)
Thailand/rest of
Asia Pacific
China
Singapore
South
Korea
Taiwan
Australia
Russia
Japan
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WHAT WAS THE ROLE OF AN INTERNATIONAL LAW
FIRM ON THIS DEAL?
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WAS THE DEAL A SUCCESS?
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CASE STUDY THREE:
BHARTI AIRTEL AND ZAIN
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THE BHARTI STORY
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BHARTI’S ACQUISITION OF ZAIN AFRICA
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BHARTI AIRTEL/ZAIN AFRICA – THE DEAL
•
•
•
•
•
US $10.7 billion
15 countries across Africa
MOU – 15 February 2010
Deal signed – 31 March 2010
Deal closed – 8 June 2010
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BHARTI’S ACQUISITION OF ZAIN AFRICA
4
14
2
1
3
5
13
1. Sierra Leone
9. Zambia
2. Burkina Faso
10. Malawi
3. Ghana
11. Tanzania
4. Niger
12. Kenya
5. Nigeria
13. Uganda
6. Gabon
14. Chad
7. Congo
15. Madagascar
6
7
12
8
11
9
10
15
8. DR Congo
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WORKSTREAMS
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MILITARY COUP
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PARTNERING WITH INDIA
PARTNERSHIP
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CLIENT’S PERSPECTIVE
Bharti press release on 31 March 2010:
“This agreement is a landmark for global
telecom industry and game changer for Bharti.
More importantly, this transaction is a
pioneering step towards South South
cooperation and strengthening of ties between
India and Africa. With this acquisition, Bharti
Airtel will be transformed into a truly global
telecom company with operations across 18
countries fulfilling our vision of building a
world-class multinational”
Sunil Bharti Mittal, chairman and managing director,
Bharti Airtel
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QUESTIONS
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