Tale of two takeover tycoons

The last 10 days have seen different types of relationships being scripted by two Mumbai-based entrepreneurs, with contrasting styles.

There are prenuptial agreements, setting the terms for an exit by any of the partners, and then there are long-term relationships, says Ajay Piramal, announcing his company’s partnership with Chennai-based Shriram Capital. The plan here was to be shoulder-to-shoulder in the journey ahead in the financial services space, he indicated.

The diversified >Piramal group’s deal with Shriram Capital , though, is clearly different from the one they exited last week – the Vodafone deal. Piramal Enterprises had invested in Vodafone with the clear plan of exiting in 12-to 18 months with a 17 to 20 percent return in the bag.

Both deals, different though they may be, bear the signature market-savvy style of extrovert Ajay Piramal, say industry-watchers.

While the Vodafone investment got the Piramal Group a return of over 50 per cent, the Shriram investment works as a vehicle for plans in the banking sector.

Another deal, another style Just weeks before these transactions, another deal had sent a flutter across industry – Mumbai-based drug-maker >Sun Pharma’s acquisition of troubled Ranbaxy Laboratories for $4 billion.

Ranbaxy is coping with intense regulatory scrutiny from the US Food and Drug Administration, as four of its India-based plants are banned from selling drugs in the US.

While the market was rife with rumours about a possible Ranbaxy sale, it was not clear who had the stomach to take it on. Sun rose up to the challenge.

Soon enough, analysts started referring to Sun chief Dilip Shanghvi as a “takeover tycoon” of sorts, a description once reserved for Ajay Piramal.

Though both entrepreneurs are known to be sharp businessmen, relying finally on their own counsel when it comes to wrapping up a deal, Shanghvi is more introverted in his style.

Nevertheless, Shanghvi has a track-record in turning around difficult companies, says an industry insider, something that works well with marketmen.

Unlike transactions between local and multinational companies that are seen to dot the deal-space, the two recent deals are driven by local entrepreneurs.

The Ranbaxy deal sees the drug-maker coming back to an Indian owner, Sun Pharma, while the Piramal-Shriram partnership is between two Indian entrepreneurs. And the journey ahead will reveal the strength of both relationships.

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