This blog is written by Aishwarya Deshpande, LLM Student at Jindal Global Law School. She was a participant of our Mergers & Acquisitions Course.
TOP MERGER DEALS OF 2022
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L&T AND MINDTREE –
NCLT gave its permission for the merger of IT services companies L&T Infotech and Mindtree. The National Company Law Tribunal’s (NCLT) Mumbai and Bengaluru Benches both accepted the scheme of amalgamation and arrangement between the two entities in two different rulings. In May 2022, the two businesses announced their intention to unite. LTIMindtree will be the name of the combined company. According to the market value of the combined firm, India will now have the fifth-largest IT service provider. The corporation has started conducting business as a single unit from November 14, 2022.
73 shares of LTI would be issued to each Mindtree shareholder out of every 100 Mindtree shares as part of the transaction. L&T, the amalgamated entity’s parent business, will own 68.73% of it. November 24, 2022 has been set as the Record Date for identifying Mindtree stockholders who are entitled to receive equity shares of LTI under the programme. The merged company employs 90,000 people and has a clientele of over 700.
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BHARTI INFRATEL MERGES WITH INDUS TOWERS-
On November 19, 2022, one of the largest mergers in India’s telecom sector was formally concluded. The largest telecom infrastructure company in our nation was created with the merger of Bharti Infratel Ltd. and Indus Towers. Bharti Airtel will own a total of 36.73% of the shares in Indus Towers Limited (together with Nettle). In accordance with the agreement, Vodafone Idea chose to sell all of its shares in Indus Towers. As a result, it has now been paid Rs 3,760 crore for all of its Indus Towers shares.
The Vodafone Group Plc received 75.78 crore equity shares worth Rs 10 each from the board of Bharti Infratel. This equates to a 28.12% ownership interest in the combined company. 8.75 crore shares, priced at Rs. 10, have been allocated to Providence. Indus Towers Ltd. is therefore owned by Providence (or PF Asia Holding Investments [Mauritius] Ltd.) to the tune of 3.25%. With more than 1,63,000 towers spread out over 22 telecom service zones, it has a pan-Indian tower reach. Additionally, according to Bharti Infratel, the consolidation of the two tower firms would result in annual cost savings of close to Rs 560 crore. On Friday, shares of the merged companies rose significantly (November 20). The price of Bharti Infratel’s shares increased by 17.8% to close at Rs.219.05 The share price of Vodafone Idea saw a rise of 8.65% and closed at Rs 10.05 on the NSE.
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MX TAKATAK MERGER WITH MOJ
The announcement of the strategic combination of Moj and MX Taka Tak to create the largest short video platform for Indians was made by MX Media, the parent company of MX TakaTak, and ShareChat, the parent of Moj. ShareChat will now oversee the two platforms.
The combined platform will have 250 billion monthly video views, 100 million artists, and over 300 million monthly active users (MAU). ShareChat will add MX Media and its stockholders as strategic shareholders. Ankush Sachdeva, CEO and co-founder of ShareChat and Moj, said, “We at ShareChat are establishing India’s largest content ecosystem, which has been on an unparalleled growth trajectory.
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PROLOGIS MERGER WITH DUKE REALTY
Two of the largest logistics real estate companies in the world are now combined thanks to the June merger of Prologis and Duke Realty. With debt included, the acquisition had a value of $26 billion and was funded by Prologis’ equity. It solidified Prologis as the biggest developer of logistics real estate in the world.
The new company, whose name has not yet been selected, will have an astounding portfolio of logistical real estate once the deal is finalized. This includes 153 million square feet of real estate spread over 18 US regions, 11 million square feet of construction currently under way, representing an investment of more than $1.5 billion, and 1,228 acres of land that is both owned and optioned.
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ORANGE MERGER WITH GRUPO MÁSMÓVIL
A new market leader for mobile phones has emerged in Spain as a result of the merger between Orange and Grupo MásMóvil. The synergies from the acquisition are expected to total €450 million annually after a four-year post-integration period, and each of the companies will have equal governance powers in the new entity (likely to be called Orange).
Although neither of the two merging partners would confirm it, it seems like a push for size that would help the new business expand into nearby countries like Spain and France. The new entity may leverage the combined financial strength of the two businesses to make crucial investments in 5G and fibre before that can happen.
ACQUISITIONS OF 2022
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ZOMATO ACQUIRES BLINKIT
Zomato has completed the acquisition of rapid commerce provider Blinkit (previously Grofers) and its warehousing and related services business, according to a filing on August 11, 2022. “The Company has finished buying all of the shareholders’ shares in BCPL. As a result, BCPL became an immediate wholly owned subsidiary of the Company, effective August 10, 2022 “said Zomato. The three most recent fiscal years saw Blinkit’s annual turnover of Rs 263 crore in FY22, Rs 200 crore in FY21, and Rs 165 crore in FY20.
In accordance with the terms of the agreement, SoftBank, the largest shareholder in Blinkit, would receive 28.71 crore Zomato shares, followed by Tiger Global with 12.34 crores, BCCL with 1.5 crore, and South Korean investor DAOL with 3.66 crore. Sequoia will receive 4.51 crore additional shares in Zomato, increasing its ownership in the company from 1.33 crore to 5.84 crore shares.
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PHONEPE ACQUIRES WEALTHDESK AND OPENQ
Walmart Owned PhonePe announced in May 2022 that it would acquire WealthDesk, an Indian wealth management fund, for $50 million, and OpenQ, a smart beta wealth management
platform, for $25 million. The deals, which totalled $75 million, were made in order to diversify PhonePe’s payment options. With its involvement in a $40 million investment round into Smallcase last August, PhonePe now has a presence in the investing and wealth management industry, where its main rival Amazon is only marginally active.
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SHIPROCKET ACQUIRED PICKRR
Pickrr is an e-commerce SaaS platform for D2C brands and SME e-tailers. Shiprocket, a tech- enabled shipment and fulfilment company, has signed a contract to acquire a majority investment in Pickrr. The deal’s estimated $200 million value is made up of cash, shares, and earn-outs. The consolidation also gives a solitary entry point for other enablers and suppliers to serve the community of digital retailers, which is constantly expanding.
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RELIANCE RETAIL ACQUIRES STAKE IN ONLINE LINGERIE RETAILER CLOVIA
According to a statement released by the business on March 20, Reliance Retail Ventures (RRV) has purchased an 89% ownership in online lingerie retailer Clovia in a deal worth Rs 950 crore that combines initial investment and secondary share sales. According to Reliance Retail Ventures’ statement, the Clovia founding team and management will hold the remaining equity in the company. Following the acquisitions of Zivame and Amante, Clovia is the third online lingerie retailer by RRV. After leading a $240 million investment round in Dunzo and acquiring a 25% share in the Bengaluru company, the agreement was announced.
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LENSKART ACQUIRED OWNDAYS
The two companies announced that India’s Lenskart is purchasing the bulk of Owndays’ shares in Japan, forming one of Asia’s largest online eyeglass sellers. The companies would not disclose the deal’s financial details, but a source with knowledge of the situation said the merger values the 32- year-old enterprise Owndays.
According to those with knowledge of the situation, the development occurs just as Lenskart, which is supported by SoftBank and Premji Invest, is closing a fresh round of fundraising at a valuation of over $4.5 billion. Shuji Tanaka and Take Umiyama, co-founders of Owndays, will remain stockholders and head the management group at the Japanese company.