Mahindra & Mahindra’s bid for Aston Martin and Indian Hotels' 'friendly' offer for Orient-Express are just the latest chapters in a series of high profile acquisitions made by Indian companies in the recent past.
Business Standard presents a series on India Inc’s track record on overseas acquisitions.
**************************************
Novelis shot in the arm for Hindalco
Novelis reported profits of Rs 745 crore in the first half of the current financial year, as demand for rolled products continued to grow
By Abhineet Kumar
Last month, when Novelis commissioned Asia’s largest beverage can recycling plant in South Korea, it added one more feather in the Aditya Birla Group’s cap.
The Novelis acquisition has done quite well for the fortunes of Hindalco, as it has consistently generated cash. In 2009-10, it generated 65 per cent (Rs 3,000 crore) of the parent’s cash flow. In 2011-12, it generated even more at 72 per cent (Rs 5,000 crore).
Click here to read full story
**************************************
Betapharm: A pill Dr Reddy's could do without
The company has learnt to live with the German disappointment, but the drag on the balance sheet continues
By Dev Chatterjee & B Dasarath Reddy
It was the most expensive foreign acquisition by an Indian company in 2006. Dr Reddy’s Laboratories had gone to town with its trophy, German branded generics company Betapharm, acquired for $560 million (Rs 2,550 crore). Six years later, the valuation of Betapharm in the company’s balance sheet is just $108 million (about Rs 590 crore), a 75 per cent fall.
It is little wonder Dr Reddy’s has dedicated a page on its website to the acquisition — ‘On events before the Betapharm acquisition and learning’. Managing Director and Chief Operating Officer Satish Reddy sums up the deal on the company website, “Sufficient understanding of the market would have actually helped us, rather than making an acquisition of that nature, overpaying, and then trying to make the best out of it.”
Click here to read full story
**************************************
Bharti's African safari remains a cash guzzler
Has already invested $13 bn and needs another $9 bn to expand business, even as cash demands rise at home
By Sounak Mitra
Sunil Bharti Mittal’s dream of moving into the big league of leading telecom companies came at a hefty price — $10.7 billion, the cost of acquiring Zain Telecom’s African assets.
Since then, an additional investment of $2.6 bn has increased the debt burden to $13.8 bn. And, this is just one of Mittal’s concerns. There is also the strong likelihood of not achieving the targets the company had set after the acquisition.
Click here to read full story
**************************************
Tata Corus: Crash, crisis and recovery effort
With Euro zone problems, it continues to weather rough times, with a 900-jobs cut as latest decision
By Abhineet Kumar
On Friday, Karl-Ulrich Köhler, chief executive officer of Tata Steel's European operations, said their proposal to cut 900 jobs was part of a strategy to transform the company into an all-weather producer, capable of succeeding in difficult economic conditions.
The announcement followed Tata Steel Europe’s operating loss of Rs 40 crore in the quarter ending September, against an operating profit of Rs 505 crore a year before.
Click here to read full story
**************************************
JSW Steel: Wait for US profits gets longer
Demand for pipes up but operations continue to flounder
By Shubhashish
Five years ago, when JSW Steel bought three plants in the US for $940 million (Rs 3,854 crore), Chairman and Managing Director Sajjan Jindal had said he expected to recover the entire investment in four years. Industry analysts agreed.
With the demand for pipes rising in the US, the country’s second-largest steelmaker was expected to gain, as it would be able to reduce the cost of manufacturing by sending slabs from its steel plant in India.
Click here to read full story
**************************************
JLR steers Tata Motors fortune
After initial hiccups, the British marquee accounted for 67% of revenues and 81% of operating profits of its parent in FY12
By Abhineet Kumar
The timing of the acquisition couldn’t have been worse. Just days after Tata Motors bought Jaguar Land Rover for £1.15 billion ( Rs 9,200 crore) four years ago, the world’s financial markets collapsed. While funds became scarce and sales plummeted, Tata Motors posted a huge loss. Even though domestic sales were robust, what brought the company down was the shoddy performance of the British car division.
The roles seem to have been reversed. In fact, if JLR had not paid a dividend of Rs 1,312 crore to Tata Motors in the second quarter of the current financial year, the parent company would have declared a loss -- a point made by chief financial officer C Ramakrishnan while declaring the company’s results.
Click here to read full story
