India Inc's M&A deal tally hits $25 billion in April-June quarter

While the number of outbound deals tripled from 22 in Q2 of 2009 to 66 in the same quarter of this year, the number of inbound deals decreased to 23 in the second quarter of 2010 as against 24 deals last year during the same period

Driven by Reliance Infratel's $10.86 billion merger deal with GTL Infrastructure, the total value of merger and acquisition (M&A) deals in the country jumped nine-fold to $24.8 billion in the second quarter (Q2) of 2010, reports PTI.

According to a monthly report of VCCEdge, the financial research platform of VCCircle.com, the M&A deal value during the April-June period touched $ 24.8 billion, taking the total M&A kitty so far this year to $48 billion. In comparison, it was $2.8 billion in the second quarter of 2009.

The deal count also witnessed an upward trend and surged to 182 in Q2 of the 2010 calendar year, compared to 98 in the year-ago period.

The period saw as many as 91 domestic deals worth $14 billion, compared to 50 deals worth $1.7 billion in the year-ago period, the report said.

While the number of outbound deals tripled from 22 in Q2 of 2009 to 66 in the same quarter of this year, the number of inbound deals decreased to 23 in the second quarter of 2010 as against 24 deals last year during the same period.

Big tickets dominated the M&A space this quarter as larger deals (worth $100 million and above) accounted for as much as 96% of the total capital invested in the second quarter this year.

"Q2, 2010, saw some big tickets deals, which sent the total M&A deal value soaring. This signalled the return of investor confidence and liquidity to the market," the report noted.

The top transaction in the April-June period was Reliance Communication subsidiary Reliance Infratel's $10.86 billion deal to merge its telecom tower business with GTL Infra. The combined entity would be the world's largest independent telecom infrastructure company, with 80,000 towers.

Other major M&A transactions during Q2 include Abbott's $3.72 billion buyout of Piramal Healthcare's solutions business and Hinduja Group's acquisition of Luxembourg-based KBL European Private Bankers for $1.67 billion.

Meanwhile, a sector-wise analysis shows that telecom, healthcare and financial services were the most targeted sectors, attracting deals worth $12 billion, $3.8 billion and $3.4 billion, respectively, in the latest quarter.

In terms of deal volume, the most active sector was information technology, which cornered 38 deals, followed by consumer discretionary and industrials, with 30 and 23 deals respectively.

The five major deals in the second quarter of this year accounted for over 75% of the total M&A deals, the report added.

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Airtel to invest $600 million in Nigerian operations

Bharti Airtel CEO Manoj Kohli told reporters in Lagos that the company will also invest in rural telephony and introduce a corporate social responsibility programme that includes setting up schools that would offer free education to underprivileged children in rural communities

India's largest cellular service company Bharti Airtel will invest $600 million in Nigeria's mobile market following its takeover of Zain Telecom's African business for around $10.7 billion, reports PTI.

Manoj Kohli, CEO, international and joint managing director, told reporters in the country's commercial capital, Lagos, on Tuesday that Bharti will also invest in rural telephony and introduce a corporate social responsibility (CSR) programme that includes setting up schools that would offer free education to underprivileged children in rural communities.

"We are very delighted to be in Nigeria and at the outset like to express our deep gratitude and than the government of Nigeria for their overwhelming support. We want to be a partner in Nigeria's growth and will work with the government to take the telecom network deep into all corners of the country to touch the common man," Mr Kohli said.

The company will also bring its ecosystem of global partners to Nigeria and this will increase employment opportunities in the country with a teeming number of unemployed school leavers.

Mr Kohli said Bharti will embark on an aggressive expansion in Nigeria in order to boost the profile of the country with a population of 150 million people as an emerging market powerhouse.

He noted that mobile phone customers in Nigeria use only 50 minutes of airtime a month whereas 450 minutes is obtainable in India and promised to make an improvement.

He sounded optimistic about the future of Africa stating: "If a company hopes to grow, they have to be in Africa and the jewel of Africa is Nigeria."

Zain's Nigeria CEO Rajan Swaroop said: "In Nigeria we will continue to build on the momentum ...introduce innovative products and services for our customers in Nigeria."

Mobile telephony was introduced in Nigeria in early 2000 and South African-based MTN controls half of the market despite the presence of some other companies like Globacom and Etisalat.

However, lowering of call tariff may give Bharti an edge as most Nigerians complain of high cost of making calls.

Bharti Airtel embarked on the largest ever telecom takeover by an Indian firm on 8 June, 2010, when it completed a transaction to buy Kuwait-based Zain Telecom's businesses in 15 African countries for $10.7 billion.

The Africa holdings include Burkina Faso, Congo, Gabon, Ghana, Kenya, Malawi, Madagascar, Niger, Sierra Leone, Tanzania, Uganda, Chad and Zambia.

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‘Telcos may start WiMAX services soon’

Subject to availability of spectrum, most operators would like to launch services as soon as possible as they are eagerly looking to recover the cost of BWA spectrum that was auctioned in June, WiMAX Forum chairman CS Rao said

WiMAX Forum, a representative body of WiMAX players, on Tuesday said telcos who have won Broadband Wireless Access (BWA) licences would like to launch WiMAX services as soon as the spectrum is made available to them, reports PTI.

WiMAX (Worldwide Interoperability for Microwave Access) is a technology, which is used to provide high speed Internet services to mobile customers.

"Subject to availability of spectrum, most operators would like to launch services as soon as possible. The operators very well know the technology available today. They are eagerly looking to recover the cost that they have paid during the auction," WiMAX Forum chairman CS Rao told reporters in New Delhi.

BWA spectrum enables high-speed Internet access as well as Internet telephony and TV services. It can also be used for voice and high-speed data services.

The government has raised over Rs38,500 crore from the BWA spectrum auction, which closed last month.

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