M&As in the auto/truck sector in fact saw an increase by 31% to reach $86.3 billion in 2008. The largest deal here was the acquisition of 87.2% stake in Continental by Schaeffler for $35.6 billion. The going does not seem to be too great here. Both companies are now struggling under a combined debt of around Euro 21 billion and even the integration is taking longer than expected. Continental Chairman Hubertus von Gruenberg has reportedly resigned over dissatisfaction with Schaeffler’s integration plan. As Kalpana Jain, Senior Director, Deloitte, puts it, “Just because valuations are good, it doesn’t mean you have to acquire. Succumbing to the hype of M&A can lead to mistakes.” 2008 also saw a major M&A from India, that of Jaguar-Land Rover by Tata Motors. Since that was also a debt funded acquisition, Tata Motors is also facing problems as its risk profile has worsened.
Also, falling commercial vehicle sales have affected its cash position, due to which ICRA has downgraded Tata Motors’ short term debt rating to A1. The technology sector, which saw the disappointment of the failed Microsoft bid for Yahoo! seems to be on the brink of excitement once again. Chances are that talks could renew between the two companies, though there is no official confirmation. HP acquired EDS last year for $13.9 billion to strengthen its services offerings. Last year saw Indian IT firms HCL Technologies and Infosys locked in a fierce battle to acquire SAP consulting firm Axon, which was ultimately won by the former with its bid of $620 million. Clearly, Indian IT firms are looking hard to diversify and would be on the prowl for targets. And on the global front, there is now news of IBM possibly going for a dose of ‘sun’shine, with talks to acquire Sun Microsystems for nearly $7 billion, to upstage HP.
Even the aviation sector saw heightened M&A activity in 2008, led by the Delta-Northwest merger, which we will discuss shortly. Telecommunications saw a drop in M&A activity in 2008 by 19% to reach $250.5 billion in value. Reliance’s and Bharti’s race for MTN ended in sorrow, but India saw a big ticket inbound deal when Japanese firm NTT Docomo acquired stake in Tata Teleservices for $2.6 billion. Also, Telenor has acquired 67.25% of Unitech Wireless for Rs.61.2 billion. More such deals are expected, since the Indian market shows promise even in slowdown.
Also, falling commercial vehicle sales have affected its cash position, due to which ICRA has downgraded Tata Motors’ short term debt rating to A1. The technology sector, which saw the disappointment of the failed Microsoft bid for Yahoo! seems to be on the brink of excitement once again. Chances are that talks could renew between the two companies, though there is no official confirmation. HP acquired EDS last year for $13.9 billion to strengthen its services offerings. Last year saw Indian IT firms HCL Technologies and Infosys locked in a fierce battle to acquire SAP consulting firm Axon, which was ultimately won by the former with its bid of $620 million. Clearly, Indian IT firms are looking hard to diversify and would be on the prowl for targets. And on the global front, there is now news of IBM possibly going for a dose of ‘sun’shine, with talks to acquire Sun Microsystems for nearly $7 billion, to upstage HP.
Even the aviation sector saw heightened M&A activity in 2008, led by the Delta-Northwest merger, which we will discuss shortly. Telecommunications saw a drop in M&A activity in 2008 by 19% to reach $250.5 billion in value. Reliance’s and Bharti’s race for MTN ended in sorrow, but India saw a big ticket inbound deal when Japanese firm NTT Docomo acquired stake in Tata Teleservices for $2.6 billion. Also, Telenor has acquired 67.25% of Unitech Wireless for Rs.61.2 billion. More such deals are expected, since the Indian market shows promise even in slowdown.
Read these article :-
Outlook Magazine money editor quits
Don't trust the Indian Media!
