december 2013 chris parsons chairman, india practice, herbert smith freehills global acquisitions:...

December 2013

CHRIS PARSONSCHAIRMAN, INDIA PRACTICE, HERBERT SMITH FREEHILLS

GLOBAL ACQUISITIONS: THE INDIA STORY

2GLOBAL ACQUISITIONS | THE INDIA STORY

INDIA’S ACQUISITIONS OVERSEAS – 112 COUNTRIES SINCE 2003

Source: Thomson Reuters, August 2013


US UK Australia Germany Singapore Canada Indonesia Italy France UAE South Africa

0

100

200

300

400

500

600

No

. of

dea

lsTARGET NATIONSBY NUMBER OF DEALS (2003-13)

Source: Thomson Reuters, September 2013


TARGET NATIONSBY VALUE (2003-13)


US UK Nigeria Australia Venezuela Singapore Canada Bermuda Mozambique

Turkey Germany0

5000

10000

15000

20000

25000

30000

Val

ue

of

dea

ls (

US

$bn

)


TARGET SECTORSBY NUMBER OF DEALS (2003-13)

High Tech Mining &Materials

Consumer Industrials Healthcare Energy &Power

Financials Media & Enter-

tainment

Telecoms0

50

100

150

200

250

300

350

400

450

No

. of

dea

ls



TARGET SECTORSBY VALUE (2003-13)

Mining & Materials

Energy & Power

Industrials Telecoms Consumer High Tech Healthcare Media & Enter-

tainment

Financials Real Estate0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Val

ue

of

dea

ls (

US

$bn

)



TOP 15 OUTBOUND CROSS-BORDER DEALS (2003-13)

Year Indian bidder Target Target sector Target’s nationValue

(US$m)

2006 Tata Steel Corus Group Metals & Mining UK 12,695

2010 Bharti Airtel Zain Africa Telecoms Nigeria 10,700

2007 Hindalco Industries Novelis Metals & Mining Canada 5,767

2010 ONGC, Repsol, Petronas, Indian Oil Carabobo Oil & Gas Venezuela 4,848

2008 ONGC Videsh Imperial Energy Oil & Gas UK 2,859

2010 Adani Enterprises Galilee Basin Coal Metals & Mining Australia 2,739

2013 ONGC Videsh & Oil India Videocon Group Oil & Gas Mozambique 2,640

2013 Apollo Tyres Cooper Tire & Rubber Automobiles & Components US 2,356

2008 Tata Motors Jaguar Land Rover Automobiles UK 2,300

2011 Adani Enterprises Abbot Point Coal Terminal Transportation & Infrastructure Australia 1,950

2010 Reliance Industries Atlas Energy – Marcellus Oil & Gas US 1,700

2008 Suzlon Energy REpower Systems Machinery Germany 1,700

2007 Essar Group Algoma Steel Metals & Mining Canada 1,467

2007 Tata Sons Kaltim Prima Coal Metals & Mining Indonesia 1,300

2011 GVK Power & Infrastructure Hancock Coal-Queensland Coal Metals & Mining Australia 1,260



A SNAPSHOT


CASE STUDY ONE:TATA STEEL AND CORUS


PUBLIC COMPANY TAKEOVER-OFFER

Takeover offer

(recommended or hostile)

Target company

PurchaserShareholdersTransfer shares


PUBLIC COMPANY TAKEOVER-SCHEME

PurchaserShareholders

75% shareholder vote

Agreed offer

Transfer/issue of shares

Target company


OVERVIEW

• Acquisition of Corus Group plc by Tata Steel for US$12.6bn

• Takeover effected by scheme of arrangement

• Competing bid from a Brazilian steel company, Companhia Siderúrgica Nacional (CSN)

• Competition culminated in an auction on 30 January 2007

• Largest ever outward investment by an India-based company

• Creates the world’s fifth largest steel company


TATA STEEL/CORUS TIMETABLE

Date Event

5 Oct 2006 Tata Steel announces interest after media speculation

20 Oct Tata Steel announces offer at 455 pence

10 Nov Tata Steel posts Scheme document (documents on display)

17 Nov CSN announces possible offer at 475 pence (virtual bid)

4 Dec Court meeting & EGM adjourned until 20 Dec

10 Dec (Sunday) Tata Steel pre-emptively increases its offer to 500 pence

11 Dec CSN announces pre-conditional offer at 515 pence

19 Dec Panel announces that if there is still a competitive situation on 30 Jan it will conduct an auction

30 Jan 2007 Auction started at 4.30 pm and concluded in early hours on 31 Jan

31 Jan Winning Tata offer of 608 pence and losing CSN offer of 603 pence announced

2 Apr Scheme effective date


350

400

450

500

550

600

650

Sep-0

1

Sep-1

1

Sep-1

9

Sep-2

7

Oct -05

Oct-13

Oct -23

Oct-31

Nov-0

8

Nov-1

6

Nov-2

4

Dec-0

4

Dec-1

2

Dec-2

0

Jan -0

2

Jan -1

0

Jan -1

8

Jan-

26

Feb-0

5

Feb-1

3

Feb-2

1

Mar

-01

CORUS SHARE PRICE

Tata 455 offer announced

CSN 515 offer announced

CSN possible 475 offer

Tata 500 offer announced

Tata interest announced

Tata 608 and CSN 603 offers announced

2006 2007


PUBLIC AUCTIONS

• The Panel announced that it would implement an auction ifCSN and Tata had not announced final offers by 30 January 2007

• The timetable was consistent with the principle that a Target should not be subject to bid speculation for an unduly long period

• The Panel has used its power to conduct auctions three times in the past.All of these have been 3-5 days long

• This is the first time the Panel has conducted an auction over such a short period (less than eight hours) and the first time that formula bids have been permitted

• Eight rounds of fixed price bidding with 5 pence minimum increments

• Ninth round of formula bidding: each bidder submitted its maximum price and differential above the highest bid of the other bidder which it was willing to pay


CASE STUDY TWO:TATA MOTORS AND JAGUAR LAND ROVER


COUNTRIES INVOLVED

Ford in US (Seller) Tata in India (Buyer)

Argentina Australia

Austria

Belgium

Brazil

Canada

China

France

Germany

Ireland

Italy JapanLatinAmericaMexico

MiddleEast &NorthAfrica

Netherlands

Norway

Portugal

Russia

Singapore

SouthAfrica

South Korea

Spain

Sub-Saharan Africa

Sweden

Taiwan

Thailand/rest of Asia Pacific

UK


WHAT WAS THE ROLE OF AN INTERNATIONAL LAW FIRM ON THIS DEAL?

Due diligenceIntellectual

property

Employment/Trade

UnionsPensions

Drafting/negotiatingdocuments

Real EstateProject

managementTax

Anti-Trust/Competition

ITDispute

resolutionEnvironment

Finance CorporateTransitional

servicearrangements

Share schemes


WAS THE DEAL A SUCCESS?


CASE STUDY THREE:BHARTI AIRTEL AND ZAIN


THE BHARTI STORY


BHARTI’S ACQUISITION OF ZAIN AFRICA


• US $10.7 billion

• 15 countries across Africa

• MOU – 15 February 2010

• Deal signed – 31 March 2010

• Deal closed – 8 June 2010

BHARTI AIRTEL/ZAIN AFRICA – THE DEAL


1. Sierra Leone

2. Burkina Faso

3. Ghana

4. Niger

5. Nigeria

6. Gabon

7. Congo

8. DR Congo

9. Zambia

10. Malawi

11. Tanzania

12. Kenya

13. Uganda

14. Chad

15. Madagascar

1

2

3

4

5

6 78

9 10

11

1213

14

15

BHARTI’S ACQUISITION OF ZAIN AFRICA


WORKSTREAMS


MILITARY COUP


PARTNERING WITH INDIA

PARTNERSHIP


Bharti press release on 31 March 2010:

“This agreement is a landmark for global telecom industry and game changer for Bharti. More importantly, this transaction is a pioneering step towards South South cooperation and strengthening of ties between India and Africa. With this acquisition, Bharti Airtel will be transformed into a truly global telecom company with operations across 18 countries fulfilling our vision of building a world-class multinational”

Sunil Bharti Mittal, chairman and managing director, Bharti Airtel

CLIENT’S PERSPECTIVE


QUESTIONS

december 2013 chris parsons chairman, india practice, herbert smith freehills global acquisitions:...

Documents

india story slide

india story target nations

india story target sectors

india practice

indiabased company

india story case study

corus slide

snapshot slide