Deal Street abuzz on M&A action

In what could be seen as a clear indication of strong investor optimism returning to the Deal Street, Tuesday saw as many as five merger and acquisition deals across sectors ranging from auto- components to pharmaceuticals and consumer durables.

While Piramal Enterprise announced the buyout of Ash Stevens Inc., a US-based contract development and manufacturing organisation, for $53 million, Sajjan Jindal-led JSW Steel said it will acquire 74 per cent stake in Praxair Oxygen Pvt Ltd for ₹240 crore in cash.

Auto-component maker Tata AutoComp Systems Ltd is acquiring TitanX, a global engine cooling system supplier, and Unilever has signed an agreement to pick Blueair, a supplier of innovative mobile indoor air-purification technologies and solutions with an eye on India.

While the M&A activity in 2015 was tepid, in 2016 the number of deals has picked up. The first half of 2016 saw 750 deals worth $21.8 billion being signed against 738 deals worth $21.1 billion in the first half of 2 015, according to Grant Thornton India LLP.

Most of the deals announced on Tuesday have been done with an eye on expanding the current product portfolio in new geographies.

Tata AutoComp’s acquisition of TitanX, for example, will allow the Indian auto-component maker to get access to markets such as North America, South America, Europe and China. TitanX has plants in these geographies with sales of approximately $200 million.

Ajay Tandon, Managing Director and CEO, Tata AutoComp Systems , said, “TitanX has the latest technology in engine cooling solutions for commercial vehicles, which will help enhance our offering to our customers in commercial vehicle segment outside India.”

JSW Steel has similarly executed a share purchase agreement with Praxair India Private Ltd to acquire their entire shareholding of 74 per cent in JSW Praxair Oxygen Private Ltd. JSW currently holds 26 per cent of the equity shares of the company, which is engaged in the business of production and sale of industrial gases such as oxygen, nitrogen and argon. It also has set up two air separation plants, each with a capacity of 2,500 tonnes per day, at Toranagallu in Bellary district of Karnataka. The acquisition provides JSW Steel the benefit of backward integration of this critical input. Piramal’s acquisition of Ash Stevens gives the Indian company access to 12 FDA-approved innovator small molecule APIs. The US-based company’s manufacturing facility has approvals from the regulatory agencies of the US, the EU, Australia, Japan, Korea, and Mexico.

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