Hindalco agrees to acquire US-based Novelis in $6-billion deal
Mumbai: Hindalco Industries has agreed to acquire US-based aluminum products maker Novelis Inc for $6 billion in an all-cash deal.

It is a significant event for Hindalco and the AV Birla Group," said Kumaramangalam Birla, chairman Hindalco Industries.
The acquisition is expected to be completed by the second quarter of the current calendar, subject to regulatory approvals and other formalities.

Hindalco will pay $44.93 in cash for each outstanding common share of Novelis, roughly 15 per cent premium to the market price.

Birla said that though there was room for another bid the company doesn't expect that to happen. The company that makes a "superior" counterbid has to pay around $100 million to Hindalco as "break-fee," which made it an expensive acquisition.

The agreement requires 66.66 per cent of Novelis shareholders present and voting to tender their shares. If this condition is satisfied, the remaining one-third of shareholders will be "squeezed out," (will have to sell to Hindalco).

Novelis' revenues stood at $8.5 billion in 2005 and it posted net loss of $102 million during the third quarter of 2006 (the calendar year is the company's fiscal year). It is a widely held company and its shareholders are largely hedge funds and institutional investors.

The company operates in 11 countries, has 36 operating units and 12,500 employees. The deal would be financed through recourse debt of $2.8 billion. Hindalco's treasury would contribute $450 million, while SL Iron Ore Mining, another group company, would contribute $300 million as debt.

Novelis already carries $2.4 billion of debt, of which $1 billion comprises term loans and $1.4 billion high-yield loans. The deal will lead to the debt-equity ratio of Hindalco going up. The ratio is at present at 0.2-0.

Post-acquisition, over 50 per cent of the group's business could come from operations outside India, which is currently at 30 per cent.
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Hindalco to enter Fortune 500 list
Mumbai: Hindalco would enter the Fortune 500 league three years before it was scheduled to do according to its internal targets.

Overseas operations already account for nearly 30 per cent of the group's revenue now and the Novelis acquisition would increase it to 40 per cent in three years.

The group would now have operations in 14 countries — the US, UK, Thailand, Malaysia, Laos, Indonesia, Philippines, Egypt, Canada, Australia, China, Germany, Hungary and Portugal.

The acquisition of Novelis also means that the group would become the world's largest player in the downstream aluminium business involving value-added products.

Analysts say the acquisition makes huge sense for Birla as globally, aluminium demand is slated to grow at 5 per cent this year. The robust growth in the Asian region, led by China, would continue to drive the demand for metals. Lately there has been a 21 per cent increase in aluminium consumption in China. A significant demand is forecasted from the East European countries.
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Vodafone bags Hutch with $19.3-billion offer
Mumbai: Vodafone has bagged Essar's 67 per cent stake for $19.3 billion. In a statement, Essar said "This is a good price which reflects the premier position of Hutchison Essar as India's leading operator." Essar now owns 33 per cent of the company and has received an offer by Vodafone to be a partner.
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BSEL Infra bags Rs1,600-crore UAE project
Dubai: A BSEL Infrastructure Realty's subsidiary has bagged a project worth Rs 1,600 crore to construct four residential towers in the UAE's new Emirates City.

The project, involving a land area of 4.5 million square feet, will be undertaken by the subsidiary company, BSEL Infrastructure Realty (FZE), at a cost of around Rs1,600 crore.

BSEL Infrastructure Realty (FZE) is a wholly owned subsidiary of Mumbai-based BSEL Infrastructure Realty, listed on both the BSE and the NSE, and the Luxembourg Stock Exchange. The company has also acquired property at Internet City in UAE, the Gulf Today said.
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MPT clears Gammon India for container project
Mumbai: The Mumbai Port Trust (MPT) Board has cleared Gammon India's Rs1,228 crore bid container project. The Mumbai Port Trust board cleared Gammon India's bid for the port's ambitious offshore container terminal that will add an additional capacity of 15 million tonnes (MT).

This comes as good news for the beleaguered company which was banned by market regulator Sebi and its chairman Abhijit Rajan from accessing the capital market for one year for irregularities in its 2001 rights issue.

The company has filed an appeal with the Securities Appellate Tribunal. Emerging as the leading bidder for the MPT project, outbidding L&T, Gammon quoted the highest revenue sharing ratio of 35.064 per cent, above L&T's 31.12 per cent.

Gammon India and L&T were the only bidders left in the fray for the project that has been delayed for two-and-a-half years due to failure to obtain security clearance for Chinese port major Hutchison Port Holdings - part of L&T's consortium.
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Anchor likely to sell stake to Japanese company
Mumbai: Switches and accessories player, Anchor Electricals is in advanced talks with Japan's National Matsushita, part of the $69-billion Matsushita Group, well-known for its Panasonic brand, to divest 49-per cent stake for Rs2,000 crore to the latter.

National is the worldwide leader in the development and manufacture of electronic products for consumer, business and industrial needs.

Matsushita is said to be is looking at buying a 70-per cent stake in the company, giving it direct access to the Indian electricals market. The Shah family- promoters of Anchor - are reportedly unwilling to give a majprity stake to the Japanese company.

Anchor enjoys a market share of close to 60 per cent in India. Prior to talks with National Matsushita, Anchor was speaking to Schneider Electric India and Siemens. However, the talks fell through due to valuation and management control differences.

Anchor recently sold its Maharashtra plant to the China's Haier Group for close to Rs100 crore.
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