M&A News: 21/7/09

 

M&A DEALS DIP 54 PERCENT IN FIRST HALF OF ’09
Sangeetha G, Chennai
Financial Chronicle  Mint  

During the first half of 2009, Indian companies were involved in a total of 136 merger and acquisition deals, down 54 percent from the same period in 2008, according to a recent study by a research firm.

In addition, the deal activity was down by 28 percent compared to the second half of 2008, according to Venture Intelligence, a research service focused on Private Equity and M&A transaction activity in India.

The average deal value during H1 2009 was $98 million, down from the average deal value of $162 million in H1 2008. During the half-year period 55 deals had announced transaction values.

In the largest deal during the period, ONGC Videsh acquired UK-listed Imperial Energy for $1.9 billion. This was followed by Tech Mahindra’s $576 million bid for Satyam Computers and Sesa Goa’s $350 million acquisition of Dempo Mining Corporation.

Over 50 percent of the deals in H1 2009 were domestic acquisitions, as against only 40 percent in H1 2008. The most preferred destination for Indian acquirers was the US with seven of the 31 outbound targets in H1 2009 located in that country, followed by the UK with three deals.

The IT & ITES and Manufacturing industries accounted for the most number of acquisitions during H1 2009 with an 18 percent share each. The activity in the IT and ITES industry however fell from 27 percent during the same period last year. The share of manufacturing deals fell marginally from 20 percent.

AVAYA TO BUY NORTEL’S ENTERPRISE SEGMENT
New Delhi
The Hindu Business Line  The Economic Times (Bangalore edition)  

Avaya in India will benefit from the global move by Avaya Inc to acquire Nortel Networks Corporation’s enterprise solutions business for $475 million.

The global deal was announced late on Monday from Toronto as part of Nortel’s plans to hive off its various businesses globally.

While Avaya is already the market leader in the enterprise communications segment, the acquisition of Nortel’s business solutions will give it more teeth in India. Nortel India has provided total call centre solutions and data networking equipment to a broad range of Indian enterprise customers across multiple vertical markets and diverse geographical areas.

In the call centre and BPO market, Nortel has more than 16,000 agent positions deployed for companies such as Bharti Airtel, Tata Consultancy Services, Hinduja Technology Media Telecom, iSeva, Office Tiger and ICICI OneSource among others. Nortel has contracts with four airports undertaking modernisation activities and also has a deal with TCS for the passport project.

Nortel also has traction in the data networking space with clients such as Centre for Artificial Intelligence and Robotics, Indian Institute of Science, Sungard Automated Securities, Apollo Health Street, Logica and Cognizant Technology Solutions. All these clients could now move to Avaya’s portfolio.

Commenting on the announcement, the Nortel President and Chief Executive Officer, Mike Zafirovski, said: “We continue to be fully focused on running our operations and continuing to serve our customers while actively engaged in the sale of our businesses. We have determined that the sale of our businesses maximises value while preserving innovation platforms, customer relationships and jobs to the greatest extent possible.”