Merger deals worth $27 billion have soured so far this year in India. The biggest non-starter was that of Mukesh Ambani-led Reliance Industries' $14.5 billion bid for LyondellBasell.
This was followed -- in terms of deal value -- by the cancellation of his younger brother Anil Ambani run Reliance Communications' $10.8 billion merger deal with GTL Infra. According to the data compiled by research firm VCC Edge, as many as nine deals have been called off this far in 2010.
"The failure of the mega deals was primarily due to valuation concern. Management control issues and strategic unsuitability of the deals was another reason for cancellations", SMC Capitals Equity Head Jagannathan Thunuguntla said.
The country's most valued firm RIL's bid to acquire a majority stake in bankrupt petrochemical group was called off by LyondellBasell after the latter found the price offer was undervaluing the company.
The transaction could have been the largest buyout ever made by an Indian firm overseas. So far, Tata Steel's acquisition of Anglo Dutch steel producer Corus Group in 2007 for $12 billion, is the biggest deal in the Indian corporate history.
Besides, the most recent cancellation was of RCom's arm Reliance Infratel's $10.8 billion tower merger deal wih GTL Infrastructure.
Interestingly, the Ambani brothers, who have been most active in merger and acquisition activity this year, accounted for over $25 billion of the deals in 2010 that could not take off in 2010.
Mukesh Ambani led RIL, last month, had made foray in the hospitality sector by picking up a 14.18
This was his seventh acquisition in the current year. Early in the year, EIH also witnessed a deal cancellation of $272 million in which Max Hospital's founder and chairman Analjit Singh was interested in 17 per cent stake in the hospitality major.
Other than the Ambani brothers, another significant deal that did not work was Singapore's GIC Special Investments' $84.7 million bid for 6.58 per cent stake in the billionaire brothers Malvinder Singh and Shivinder Singh led Fortis Healthcare.
Naveen Jindal led Jindal Steel and Power was also denied a stake in Zimbabwe Iron & Steel, estimated to be in the range of $600 million-$1 billion by the government, as it did not approve of selling the ailing company to large corporates.
Rest of the transactions that turned sour so far this year include -- US based Scripps Networks Interactive attempt to buy stake in NDTV Lifestyle, drug major Abott Laboratories' interest in Wockhardt, multiplex chain PVR Cinemas' bid for DT Cinemas and Ingersoll Rand USA's attempt to merge the Indian subsidiary into itself.
