Technology unicorns and startups that might go for merger/acquisition this year
It looks like it is going to be a year of merger and acquisitions just like the previous year. Read to know which technology companies might go the same route this year and who will be the possible merged and acquiring entities.
The year 2017, earmarked a flurry of mergers and acquisitions. With more than 1000 mergers a total of Rs 1,81,605 crore was raised in the year 2017. The year ended on a positive note and cheered the private equity players too. A lot of hopes were raised from the year 2018 in terms of IPO's and M&A. In this article, we will list the blockbuster deals that would soon become the talk of the town.
Flipkart-Amazon-Walmart deal- e-commerce battle intensified when the tug of war started in between the two giants Flipkart and Amazon. There was a time when Flipkart even gave a run for the money to its counterpart, but now it seems the company has nailed down itself. Yes! You heard it right, the rumour mills are abuzz that soon Flipkart will soon be acquired by Amazon (this deal would face a lot of regulatory hurdles) or Walmart (a forerunner in the race). The deal still needs a nod of approval from the CCI. Once the deal happens between Amazon and Flipkart, it will own a dominant position (90%) in the e-commerce space.
Axis Bank- a sudden move to shorten the tenure of Shikha Sharma (CEO of Axis Bank) has created a hullabaloo in the banking sector, but Uday Kotak sees it as an opportunity to make a bid for the bank. Though Axis Bank loan book is rising and is two-fold more than Kotak Mahindra Bank, this deal would make Kotak the biggest private sector bank with respect to the branches and outlets. Kotak would gain in terms of deposits ( it will be raised to 5 times) and it would improve its CASA ratio. Most importantly, this would help Uday Kotak to dilute its stake in order to meet the RBI norms. Seeing the above developments, Kotak shares has surged up by Rs 1113.60 a piece while Axis Bank shares increased by 546 points.
Vodafone- Idea merger- the much-awaited merger of India's number 2 and number 3 carriers has created a ray of hope for the subscribers. The telecom department is yet to approve this merger, but it is believed that once it takes place the company Vodafone would surely benefit from it in terms of subscribers and revenue market share. The merged entity will have more than 410 million customers and nearly 42% market share and 37% revenue share, leaving it strong placed against its competitor Jio(which currently has 160 million subscribers). The merger has been granted a nod from SEBI, NCLT and CCI.
Ola-Uber merger- These taxi-hailing service providers revolutionised the transportation system and created a niche for the affordable taxi hiring service. And now it seems the merger is on the cards. Japanese investment firm Softbank, which is the investor in both the company plans to merge Ola with Uber. However, the blueprint of the deal is not yet worked upon, but Ola spokesperson has confirmed that the company is looking ahead for the opportunities to expand its business.
Dish TV-Videocon- The company who entered the market with lots of hopes, but it failed to make the customers happy and after one year of a snag, finally these two DTH providers are going to get merged with Videocon, on the dominant position. This would result in an increase the subscriber base of Videocon to 28 million. The deal has been approved by the board of both the companies, however, CCI and Ministry of Information and Broadcasting Technology is yet to approve it.
Will these mergers and acquisition deals eschew the competition or will it get defecated is yet to be seen, but for now we believe positivity is in the air.