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Ambanis lead list in sour M&As

business Updated: Sep 12, 2010 22:42 IST
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Placed among the wealthiest people globally, the Ambani brothers' groups also have the dubious distinction of accounting for over 90 per cent of the estimated $27 billion merger and acquisition deals that could not fructify so far this year, says a research report.

The biggest non-starter was Mukesh Ambani-led Reliance Industries' $14.5 billion all-cash bid for acquiring a majority stake in bankrupt petrochemical group LyondellBasell Industries. The mega deal collapsed in March after LyondellBasell termed RIL's proposal as undervalued. Younger sibling Anil Ambani-led Reliance Communications' move to merge its telecom tower business with GTL Infra in a $10.8 billion also failed to take off.

According to the data compiled by research firm VCC Edge, as many as nine deals have been called off so far in 2010, together worth about $27 billion. Out of them, the deals from the stable of both the Ambanis that failed, alone accounted for $25 billion.

"The failure of the mega deals were primarily due to valuation concerns. Besides, management control issues and strategic unsuitability of these deals were another reason for the failure," SMC Capitals Equity Head Jagannathan Thunuguntla said.

Another transaction that flopped was Singapore's GIC Special Investments' $84.7 million offer for a 6.58 per cent stake in Fortis Healthcare, which is promoted by Malvinder Singh and Shivinder Singh.