'Price adjustment, a common reason for disputes'

Delay and dispute in M&A deals

Mergers and acquisitions (M&As) are slowly turning out to be painfully long, and most of the times burdened with disputes in one form or the other. Let's first take a local example: After negotiations stretching over 50 days, Reliance Communications and South Africa's MTN Group ended talks that could have seen a potential telecom powerhouse emerge. Even as the media and analysts try and discover the corporate `whodunit' behind it all, many are left to wonder what happened to the times of deals such as Ranbaxy-Daiichi or even Hindalco-Novelis, which sailed through in comparison...
What seems to be the problem in these potential deals? "Recent experiences in more mature M&A markets (mainly continental Europe and the US) show that transactions concluded in these geographies either go through a lengthy negotiation process or a formal dispute resolution process with respect to purchase price after the deal has been signed," says Mr Srikant Krishnan, Partner, Ernst & Young.

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'Many Indian companies are acquiring US assets'

Skeletons in M&A cupboards

The Foreign Corrupt Practices Act (FCPA) is a US federal law mostly known for clamping down on bribery of foreign officials. If one would review FCPA enforcements over the last five 5 years, India finds a name mention in over 70 enforcements; and of the enforcements in 2007, more than half of them arose in the context of M&A (merger and acquisition) activity. "These are figures that India Inc. cannot ignore," says Ms Navita Srikant, Partner, Fraud Investigation & Dispute Services, Ernst & Young.

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'We are likely to see more Indian mining companies in quest for natural resource outside India'

Why PE has taken little interest in the Indian mining sector

The mining sector is experiencing tremendous demand, and prices of raw material are at an all-time high. Naturally, mining projects, both domestic and abroad, have become more viable than ever before, according to experts.
While new business models have evolved due to higher levels of liquidity and greater degree of participation from project financing companies, private equities and financial institutions, is financing easy? “Bringing new assets to stream remains replete with challenges and risks,” says Mr Kameswara Rao, PricewaterhouseCoopers’ India Energy, Utilities and Mining leader.

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Portrait - July 3

Sanjay_Mehta, MAIA - Illustration by Rajesh