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December 2013 CHRIS PARSONS CHAIRMAN, INDIA PRACTICE, HERBERT SMITH FREEHILLS GLOBAL ACQUISITIONS: THE INDIA STORY.

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Presentation on theme: "December 2013 CHRIS PARSONS CHAIRMAN, INDIA PRACTICE, HERBERT SMITH FREEHILLS GLOBAL ACQUISITIONS: THE INDIA STORY."— Presentation transcript:

1 December 2013 CHRIS PARSONS CHAIRMAN, INDIA PRACTICE, HERBERT SMITH FREEHILLS GLOBAL ACQUISITIONS: THE INDIA STORY

2 2 GLOBAL ACQUISITIONS | THE INDIA STORY INDIA’S ACQUISITIONS OVERSEAS – 112 COUNTRIES SINCE 2003 Source: Thomson Reuters, August 2013

3 3 GLOBAL ACQUISITIONS | THE INDIA STORY TARGET NATIONS BY NUMBER OF DEALS ( ) Source: Thomson Reuters, September 2013

4 4 GLOBAL ACQUISITIONS | THE INDIA STORY TARGET NATIONS BY VALUE ( ) Source: Thomson Reuters, September 2013

5 5 GLOBAL ACQUISITIONS | THE INDIA STORY TARGET SECTORS BY NUMBER OF DEALS ( ) Source: Thomson Reuters, September 2013

6 6 GLOBAL ACQUISITIONS | THE INDIA STORY TARGET SECTORS BY VALUE ( ) Source: Thomson Reuters, September 2013

7 7 GLOBAL ACQUISITIONS | THE INDIA STORY TOP 15 OUTBOUND CROSS-BORDER DEALS ( ) YearIndian bidderTargetTarget sectorTarget’s nation Value (US$m) 2006Tata SteelCorus GroupMetals & MiningUK12, Bharti AirtelZain AfricaTelecomsNigeria10, Hindalco IndustriesNovelisMetals & MiningCanada5, ONGC, Repsol, Petronas, Indian OilCaraboboOil & GasVenezuela4, ONGC VideshImperial EnergyOil & GasUK2, Adani EnterprisesGalilee Basin CoalMetals & MiningAustralia2, ONGC Videsh & Oil IndiaVideocon GroupOil & GasMozambique2, Apollo TyresCooper Tire & RubberAutomobiles & ComponentsUS2, Tata MotorsJaguar Land RoverAutomobilesUK2, Adani EnterprisesAbbot Point Coal TerminalTransportation & InfrastructureAustralia1, Reliance IndustriesAtlas Energy – MarcellusOil & GasUS1, Suzlon EnergyREpower SystemsMachineryGermany1, Essar GroupAlgoma SteelMetals & MiningCanada1, Tata SonsKaltim Prima CoalMetals & MiningIndonesia1, GVK Power & InfrastructureHancock Coal-Queensland CoalMetals & MiningAustralia1,260 Source: Thomson Reuters, September 2013

8 8 GLOBAL ACQUISITIONS | THE INDIA STORY A SNAPSHOT

9 9 GLOBAL ACQUISITIONS | THE INDIA STORY CASE STUDY ONE: TATA STEEL AND CORUS

10 10 GLOBAL ACQUISITIONS | THE INDIA STORY PUBLIC COMPANY TAKEOVER-OFFER Takeover offer (recommended or hostile) Target company PurchaserShareholders Transfer shares

11 11 GLOBAL ACQUISITIONS | THE INDIA STORY PUBLIC COMPANY TAKEOVER-SCHEME PurchaserShareholders 75% shareholder vote Agreed offer Transfer/issue of shares Target company

12 12 GLOBAL ACQUISITIONS | THE INDIA STORY

13 13 GLOBAL ACQUISITIONS | THE INDIA STORY 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

14 14 GLOBAL ACQUISITIONS | THE INDIA STORY TATA STEEL/CORUS TIMETABLE DateEvent 5 Oct 2006Tata Steel announces interest after media speculation 20 OctTata Steel announces offer at 455 pence 10 NovTata Steel posts Scheme document (documents on display) 17 NovCSN announces possible offer at 475 pence (virtual bid) 4 DecCourt meeting & EGM adjourned until 20 Dec 10 Dec (Sunday)Tata Steel pre-emptively increases its offer to 500 pence 11 DecCSN announces pre-conditional offer at 515 pence 19 DecPanel announces that if there is still a competitive situation on 30 Jan it will conduct an auction 30 Jan 2007Auction started at 4.30 pm and concluded in early hours on 31 Jan 31 JanWinning Tata offer of 608 pence and losing CSN offer of 603 pence announced 2 AprScheme effective date

15 15 GLOBAL ACQUISITIONS | THE INDIA STORY Sep - 01 Sep - 11 Sep - 19 Sep - 27 Oct - 05 Oct - 13 Oct - 23 Oct - 31 Nov - 08 Nov - 16 Nov - 24 Dec - 04 Dec - 12 Dec - 20 Jan - 02 Jan - 10 Jan - 18 Jan - 26 Feb - 05 Feb - 13 Feb - 21 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

16 16 GLOBAL ACQUISITIONS | THE INDIA STORY PUBLIC AUCTIONS The Panel announced that it would implement an auction if CSN 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

17 17 GLOBAL ACQUISITIONS | THE INDIA STORY CASE STUDY TWO: TATA MOTORS AND JAGUAR LAND ROVER

18 18 GLOBAL ACQUISITIONS | THE INDIA STORY COUNTRIES INVOLVED Ford in US (Seller)Tata in India (Buyer) Argentina Australia Austria Belgium Brazil Canada China France Germany Ireland Italy Japan Latin America Mexico Middle East & North Africa Netherlands Norway Portugal Russia Singapore South Africa South Korea Spain Sub- Saharan Africa Sweden Taiwan Thailand/rest of Asia Pacific UK

19 19 GLOBAL ACQUISITIONS | THE INDIA STORY WHAT WAS THE ROLE OF AN INTERNATIONAL LAW FIRM ON THIS DEAL?

20 20 GLOBAL ACQUISITIONS | THE INDIA STORY WAS THE DEAL A SUCCESS?

21 21 GLOBAL ACQUISITIONS | THE INDIA STORY CASE STUDY THREE: BHARTI AIRTEL AND ZAIN

22 22 GLOBAL ACQUISITIONS | THE INDIA STORY THE BHARTI STORY

23 23 GLOBAL ACQUISITIONS | THE INDIA STORY BHARTI’S ACQUISITION OF ZAIN AFRICA

24 24 GLOBAL ACQUISITIONS | THE INDIA STORY 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

25 25 GLOBAL ACQUISITIONS | THE INDIA STORY 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 BHARTI’S ACQUISITION OF ZAIN AFRICA

26 26 GLOBAL ACQUISITIONS | THE INDIA STORY WORKSTREAMS

27 27 GLOBAL ACQUISITIONS | THE INDIA STORY MILITARY COUP

28 28 GLOBAL ACQUISITIONS | THE INDIA STORY PARTNERING WITH INDIA PARTNERSHIP

29 29 GLOBAL ACQUISITIONS | THE INDIA STORY 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

30 30 GLOBAL ACQUISITIONS | THE INDIA STORY QUESTIONS


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