M&As more than double to $12.3 bn in ’04

There were several big-ticket deals for 2004 which included sale of L&T’s cement division to the AV Birla group for $572 million and General Electric (GE) selling a part of its Business Process Outsourcing (BPO) business to private equity partners – General Atlantic Partners and Oak Hill Capital Partners – for $500 million.

The other significant deal was that of AT&T Wireless selling its 33 per cent holding in Idea Cellular to Singapore Technologies Telemedia (STT) and Telekom Malaysia (TM). The two overseas partners also brought in fresh equity resulting in a deal size of $390 million for a 47.7 per cent holding.

In terms of advisors to the deals in 2004, Citigroup led the pack followed by Ernst & Young (E&Y), DSP Merrill Lynch and Ambit Corporate Finance, says a Bloomberg survey.

Citigroup accounted for a total volume of $1.56 billion while E&Y was just a notch lower at $1.53 billion. Significantly, there has been an increase in Indian companies acquiring overseas players – Tata Steel’s $284 million buyout of Singapore-based Natsteel is one such instance.

Tata-owned Videsh Sanchar Nigam Ltd (VSNL) was also on deal street recently, buying over US-based Tyco International for $130 million. Reliance Industries’ takeover of Flag Telecom for $ 107 million was another big ticket overseas acquisition by an Indian company.

According to DSP Merrill Lynch joint managing director Rajeev Gupta, the FDI inflow during 2004 was not as active as one had anticipated. ‘‘We are confident that this will increase in 2005. The result of this increase is that there will be an incremental effect in the M&A sector,’’ he added.

Says Kotak Investment Banking executive director S Sriniwasan, there have been high confidence levels in the sector. ‘‘There will be more momentum that will be gathered in 2005 apart from more domestic consolidation,’’ he said.

Overseas fund raising gets a boost

MUMBAI: In 2004, Indian companies went on a fund raising spree abroad. India Inc raised $ 3.9 billion abroad as compared to only $450 million raised abroad in the previous year. Citibank alone raised $ 793 million abroad while Deutsche Bank raised $ 718 million. JP Morgan came third by raising $ 710 million for Indian companies.