Adani, Ambani to drive M&A deals to diversify business

Both the companies will be seen participating in the upcoming 5G auction

Ambani-Adani clash, power unit auction
Mukesh Ambani-led Reliance Industries and Adani Power, owned by billionaire Gautam Adani, will be clashing at the auction of the distressed power unit

Business tycoons Mukesh Ambani and Gautam Ambani will continue with mergers and acquisitions (M&A) in India to fulfil their bid to diversify their businesses, Bloomberg said quoting a report by Barclays Plc.

In an interview with Bloomberg TV, Pramod Kumar, managing director and head of investment banking for India at Barclays, said that M&A trend was evident from the Adani and Reliance groups’ recent foray into newer areas.

“They do have capital backing them, so we will continue to see them spot opportunities in this environment,” he said.

Also read: Indian economy to grow by 7.1-7.6 % in current fiscal: Report

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According to Bloomberg, while Adani made a $10.5 billion deal for Holcim Ltd.’s Indian operations, while Reliance Industries is vying to take over the India operations of German retailer Metro AG.

Reliance Industries has also been eyeing the pharmacy retail business of Walgreens Boots Alliance, Inc. (WBA) and that of Apollo Global Management. It has been an unsuccessful dream after WBA revisited its decision to sell the division.

Reliance has already acquired companies like REC Solar while holding a 40 per cent stake in SWREL (earlier known as Sterling and Wilson Solar Ltd).

This apart, both the companies will be participating in the 5G spectrum action. It is being speculated that Adani, who entered the 5G race last week, may be eyeing to acquire Vodafone Idea to spread its ambit to the telecom sector.

Also read: It’s official: Adani to take on Ambani for 5G spectrum

Kumar says that more capital will be available to enable these companies to strike M&A deals. He also cautions that that acquisition and mergers may be slower than expected as investors at present are wary to invest due to the rising interest rates and falling value of Indian rupee.

“The overall deal momentum in the second half is certainly slowing down, that would impact the overall deal activity,” he added.

 

 

 

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