The deal that has enabled Mahindra and Mahindra to take control of Reva Electric Car Co. is one of a series of headline-grabbing deals we have seen in the recent days.
The deal comes in the wake of the merger of ICICI Bank and Bank of Rajasthan, the sale of a Piramal Healthcare Ltd division to Abbott Laboratories, the acquisition of Brazil’s Issue Group by Godrej Consumer Products and the purchase of the private banking business of Belgium’s KBC Bank by the Hinduja Group. This is clearly the season for corporate deals.
Each recent deal tells us a different story. The ICICI Bank acquisition is a sign that there are consolidation possibilities in many sectors, including telecom. The Godrej overseas acquisition shows how Indian companies can use strong balance sheets to buy good assets abroad. The Piramal and Reva deals tell us about how Indian managements are no longer shy of giving up control of “their” enterprises.
All this augurs well for the Indian economy, and not just for the investment bankers who earn fat fees helping firms buy and sell assets.