New Delhi, November 22: Reliance Industries is all set to make the country’s biggest global acquisition if it emerges as the successful bidder for bankrupt LyondellBasell– one of the world’s largest polymers, petrochemicals and fuels company.
Reliance and LyondellBasell have issued statements confirming a “preliminary non-binding offer” to acquire “a controlling interest” in the world’s third largest independent chemical maker.
Though Reliance Industries did not disclose the offer size, industry sources said bid for LyondellBasell would be over USD 12 billion, making it the largest ever acquisition by an Indian firm.
The biggest-ever deal involving an Indian company is Tata Steel’s takeover of European Corus for USD 12 billion, followed by British telecom giant Vodafone’s purchase of a controlling stake in Indian mobile services provider Hutch Essar for about USD 10 billion.
Other big ticket Indian merger and acquisitions include Aditya Birla group company Hindalco’s Novellis acquisition (USD 6 billion), Ranbaxy’s sale to Japan’s Daiichi (USD 4.5 billion), ONGC-Imperial Energy (USD 2.8 billion), NTT DoCoMo-Tata Tele (USD 2.7 billion), HDFC Bank-Centurion Bank of Punjab (USD 2.4 billion), Tata Motors-Jaguar Land Rover (USD 2.3 billion) and Suzlon-RePower (USD 1.7 billion).
The said deal would act as a catalyst to drive India Inc’s shopping spree and would also give a fillip to the slugging M&A activity of the country.
According to global consultancy firm Grant Thornton, during the first 10 months of this year, the total number of M&A deals stood at 234 deals with an announced value of USD 7.66 billion, against 405 deals amounting to USD 27.12 billion during the corresponding period in 2008.
The total number of M&A deals announced during the calendar year 2008 stood at 454 with a total announced value of USD 30.95 billion, Grant Thornton added.
LyondellBasell would put RIL into the top echelons of chemical producers in the world. LyondellBasell last year had USD 50.7 billion in revenues and employed 15,000 people across 19 countries. Reliance is the world’s biggest producer of polyester yarn and fibre and is one of the top 10 producers of petrochemical products.
LyondellBasell’s US operations and one of its European holding firms filed for bankruptcy protections this year, weighed down by a massive debt and declining demand.
The RIL-LyondellBasell deal may take a few months to conclude. The successful bidder for LyondellBasell, would be decided by the US bankruptcy court.
LyondellBasell’s global manufacturing operations cover 61 facilities across 19 countries.
—Agencies