India link high on M&A rumours

India link high on M&A rumours

In London, the bourses are abuzz with takeover rumours involving companies with a significant India presence, all of which have seen a sharp surge in their share prices, pushing their collective market value by close to £16 billion (Rs90,880 crore) over the past week.

These companies include mobile giant Vodafone Group Plc., energy firms Cairn Energy Plc. and BP Plc. and insurers Aviva Plc. and Prudential Plc. While Vodafone has a majority stake in Indian mobile operator Vodafone Essar, Cairn Energy sold shares of its Indian unit, Cairn India, at bourses there last year.

Insurance companies Aviva and Prudential also have significant presence in the Indian market through their joint ventures with Dabur India Ltd and ICICI Bank Ltd. All these companies have been named in various merger and acquisition rumours in British media reports, with Cairn, Vodafone, Aviva and Prudential as potential targets being eyed by the likes of BP and Italy’s Assicurazioni Generali SpA. Rumours are also doing the rounds that NRI business tycoon Lakshmi Mittal has set his eyes upon Cairn through Oil and Natural Gas Corp. Ltd-Mittal, a joint venture with India’s state-run energy giant.

Most of the speculation has been denied, with market watchers also seeing little merit in the talks about a possible takeover of firms such as Vodafone.

Still, the share prices of the companies named in the rumours have risen up to 10%, with the market value of the six companies—Vodafone, ArcelorMittal, Aviva, Cairn Energy, Prudential and BP—going up by £15.75 billion in the past week to £320 billion.