October 2007
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Mid-sized M&As to thrive in Asia

Mid-sized mergers and acquisitions were expected to flourish across emerging Asia with China the market leader, followed by India, a report by a consulting and auditing firm said Thursday. Asia's mid-market deals currently make up more than 20 per cent of the world's total, according to the Deloitte report. The volume of mid-sized deals, defined as $50 million to $250 million, has grown tenfold in the past four years, it added. While interest-rate worries and lending concerns could stem the surge in large-scale mergers and acquisitions (M&A), the mid-market deals have demonstrated strong resilience, Deloitte said. “We expect the M&A market in the Asia-Pacific to continue to grow due to strong fundamentals and robust growth in this region,” The Business Times quoted chief executive officer Chaly Mah as saying. “Many investors are buying into a piece of the action in fast-growing economies like China, India and Vietnam.” China accounts for more than 40 per cent of all mid-market deals in Asia. The country's foreign exchange surplus represents massive potential spending power for outbound cross-border deals, the report said. [...]

HDFC Bank acquires stake in HDB Financial Services

Leading private sector banker, HDFC Bank acquired 4.50 million equity shares of Rs 10 each in HDB Financial Services for an undisclosed sum. Upon this acquisition of shares it has become subsidiary of the bank. Recently, the bank reported a substantial jump in net profits for the quarter ended June 2007. During the quarter, the company experienced a 34.24% rise in profits to Rs 3,212.30 million from Rs 2,393.00 million in the same quarter, last year. The interest earned for the quarter rose 41.32% to Rs 21,258.80 million as against the corresponding quarter of the previous year. HDFC Bank was set up in 1994 by India`s leading housing finance company Housing Development Finance Corporation (HDFC). The bank offers a wide range of services which can be classified into three categories; namely treasury, wholesale banking, and retail banking services. The bank at present has an enviable network of over 684 branches spread over 316 cities across India. All branches are linked on an online real-time basis. The bank also has a network of about over 1,695 networked ATMs across these cities.(My Iris) [...]

Private Equity Parties Hearty in India

Private equity firms from the U.S. have been sniffing around India seriously for over a decade now. But in the past year, the private equity investor has been working overtime. In the country's five-star hotels, top restaurants, and airport VIP lounges, dealmakers in dark suits are omnipresent, carrying stacks of papers and looking for investments in everything from banking and financial services to real estate, health care. technology, and media. What's bringing them to India is a combination of the country's rising consumerism, impressive growth in gross domestic product, and a hot stock market. Now private equity deals are hitting record levels: $10.8 billion in the eight months of 2007, way above the $7.8 billion invested in all of 2006, according to Grant Thornton International, one of India's oldest accounting firms. Money is pouring into companies on the growth curve, those that are about to gain access to the capital markets, and even listed companies looking to expand. [...]

Volvo to acquire majority stake in Eicher Motors

Eicher Motors shares zoomed ahead on reports that European automobile major Volvo is in advanced negotiations to acquire majority stake in the company. According to reports, Volvo has offered Rs 675 per share against competitor Daimler's Rs 500. The deal price translates into a market capitalisation of around Rs 2,000 crore for Eicher Motors. This is way above Eicher's current market price of Rs 480 per share and market capitalisation of Rs 1,200 crore. A key reason for such a high valuation is that global truck makers are looking at India as a significant growth market. Volvo is expected to acquire majority stake in the company either from the promoters or through fresh issue of shares trough the preferential route. The promoters currently hold 61.76 per cent in the company. This includes 3.56 per cent indirectly owned by DaimlerChrysler. (ET) [...]