| | | Question of the Week Uncertainty around the proposed merger of Zee and Sony highlights the high failure rate of such marriages. Which is considered the largest ever M&A deal in terms of transaction value, that failed to be consummated? | | |  | | Good Morning | | The News in Summary After failing to close their proposed merger for the last two years, Zee and Sony gave themselves another month in which to find common ground on the hurdles preventing their consummation. Elsewhere, the Adani group after getting a clean chit from agencies in the US and India, commenced its roadshows for high net worth retail investors while struggling SpiceJet made a surprise declaration of interest in buying bankrupt Go First. Meanwhile, Pepsi’s largest Indian bottler Varun Beverages made a Rs 1000 crore acquisition in South Africa in order to expand its footprint into the continent. Finally, Ford decided it doesn’t want to go ahead with the sale of its last remaining plant in India to the JSW group. | | |  | | | | Last Minute Reprieve for Zee as Sony Extends Merger Deadline Zee Entertainment Enterprises got a reprieve after potential partner Sony Pictures agreed to give some more time to close a proposed merger of the two companies that has been in the works for the last two years. The deadline to cement the $10 billion deal was 21 December, but a one-month extension gives the two parties time to sort out pending differences, in particular the position of Punit Goenka, the current managing director and CEO of Zee and founder Subhash Chandra’s son. While in the original agreement, Goenka was meant to head the merged entity, Sony has now asked him to renounce this position following his investigation by the Securities and Exchange Board of India (Sebi), over funds diversion from Zee via certain promoter group firms. A Securities Appellate Tribunal has set aside the order pending completion of Sebi’s probe, but Sony isn’t keen on risking an adverse judgment. Sony’s unease with the deal grew last week after Zee’s investors rejected the reappointment of two independent directors, Vivek Mehra and Sasha Mirchandani, perceived to be close to the the founders, at the company’s annual general meeting (AGM). | | | | Reenergized Adani Restarts Road Shows with Retail Investors  Amidst a surge in its stock prices following positive news from the Supreme Court and the US International Development Finance Corporation, the Adani group has kicked off a series of roadshows aimed at attracting wealthy retail investors to buy shares of its 10 listed companies. A previous such effort, in February this year, had to be abandoned after the publication of a damning report by US short seller Hindenburg Research. In the first of 26 such multi-city roadshows the group plans to make through 2024, a dozen top group executives led by group chief financial officer (CFO) Jugeshinder Singh and Jeet Adani, the younger son of founder Gautam Adani, met prospective investors in Pune. In presentations, the men shared how all the six businesses that were incubated inside Adani Enterprises and which were independent now, are unicorn cash-generating businesses. The roadshows appear to be well-targeted since despite its rollercoaster ride on the bourses through the year, retail investors have increased their holdings in Adani stocks in the past nine months. Marking the turnaround in its fortunes, the group is planning to infuse $1 billion in its green energy unit. | | | | | | | | Struggling Go First Finds Surprise Suitor in Struggling SpiceJet Grounded Go First which looked to be headed for insolvency suddenly found a raft of suitors headed by cash-strapped SpiceJet Ltd which notified exchanges that it had “expressed interest with the Resolution Professional of Go First and wish(es) to submit an offer post diligence.” Sharjah-based aviation firm Sky One which offers services like cargo charters, asset trading, training, MRO, advisory and capacity optimization, as well as and Africa-focused Safrik Investments have also shown interest in acquiring the Wadia group airline which declared voluntary bankruptcy in May 2023, citing financial losses. But it’s the interest from SpiceJet that has raised eyebrows. The airline’s board has approved raising over Rs 2,250 crore through a preferential issue of shares and warrants which could be used to fund the possible acquisition. However, given its own financial woes, including issues with aircraft lessors, four of whom have sought insolvency proceedings against the Ajay Singh-owned airline for defaulting on payments, the plan seems highly ambitious. | | | | Varun Beverages Serenades Africa with South Africa Acquisition  In an effort to expand its geographical footprint in the rapidly growing Africa market, Varun Beverages Ltd (VBL), one of the largest franchise bottlers of PepsiCo in the world, is set to acquire 100% of South Africa's The Beverage Company Ltd (BevCo) at an enterprise value of ZAR 3 billion (Rs 1,320 crore). BevCo, which manufactures and distributes PepsiCo and own-branded non-alcoholic beverages in South Africa, the continent’s largest soft drinks market, had net revenue of ZAR 3,615 million (Rs 1,590 crore) in FY23. The company also has franchise rights from PepsiCo Inc., for Lesotho and Eswatini and distribution rights for Namibia and Botswana. For VBL, PepsiCo’s largest bottler in India with franchise rights for Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe, the move into South Africa, a market dominated by PepsiCo’s rival Coca Cola, offers a huge upside. BevCo’s FY23 revenue of Rs 1,590 crore, is roughly 12% of VBL’s net sales of Rs 13,731 crore in 2022. | | | | Ford Has a Rethink on Chennai Plant Sale In a surprise move, Ford Motor Co scrapped plans to sell its last remaining plant in India, in Tamil Nadu, to the Sajjan Jindal-led JSW Group, signalling a possible rethink of its decision taken two years ago to completely exit the India market. JSW was in talks with Ford since August this year to acquire the plant for approximately $100 million. The US MNC decided to wind up operations in the country in September 2021, and had sold its Sanand, Gujarat, plant to Tata Passenger Electric Mobility Ltd Rs 725 crore in January this year. Ford hasn’t clarified its reason for halting the sale and whether it is looking at other potential buyers or a sweeter deal from the JSW group, a recent entrant into India’s automobile sector. Vietnamese electric carmaker VinFast, which is looking to enter the Indian market and an unnamed contender are also believed to be interested in buying the plant. With India now the third largest auto market in the world, auto makers are reassessing their strategies especially for electric vehicles. | | |  | | | | Last Word After 64 years of robust growth marked by innovation and a reputation for quality followed by a somewhat less glorious decade of upheaval and accounting scandals leading to heavy losses, Japanese giant Toshiba is being delisted. A consortium led by Japan Industrial Partners which paid $14 billion to acquire the electronics-to-power stations maker, will take Toshiba private, placing it in the hands of Japanese companies after years of battles with overseas activist shareholders. That will offer little recompense to its 106000 employees who now face an uncertain future as the little-known private equity fund mulls over whether the company which makes batteries, chips, and nuclear and defence equipment, needs to be split up. And to think that through the first decade of this century, Toshiba was named the "Manufacturer of the Year" eight times by Marketing Research Consultants (MRC). How the mighty fall! | | | | This FT video looks at the many stumbles that led to the fall of Toshiba, once one of Japan’s most celebrated corporations: | | | | Answer to the Question The proposed $232 billion merger in 2020 between AstraZeneca and Gilead Sciences that was called off owing to a lack of interest from Gilead and the covid-19 pandemic is considered the biggest M&A that failed to complete. | | | Do you have any questions? Send in your queries to sundeepkkhanna@gmail.com Were you forwarded this email? Did you stumble upon it online? Sign up here. | | Written by Sundeep Khanna. Edited by James Mathew. Produced by Shad Hasnain. Send in your feedback to newsletters@livemint.com. | | | | | Download the Mint app and read premium stories | | | | | | View in Browser | Privacy Policy | Contact us You received this email because you signed up for Mint Top of the Morning or because it is included in your subscription. Copyright © HT Digital Streams. All Rights Reserved | | | | |
