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Deals Buzz: Mahindra takes the wheel of Ford’s India business

Mahindra and Mahindra will own 51% in the new entity while the remainder will be held by Ford. Photo: ReutersPremium
Mahindra and Mahindra will own 51% in the new entity while the remainder will be held by Ford. Photo: Reuters

In other news, Khatabook, a mobile app that enables small and medium enterprises (SMEs) track business transactions, has raised a $25 million ( 178 crore) Series A round from GGV Capital, partners of DST Global, RTP Ventures, Sequoia India, Tencent and Y Combinator

Mumbai: Mint brings you your dose of the top deals news, reported from newsrooms across the country

Mahindra takes the wheel of Ford’s India business

Ford Motor Co. will cede control of most of its India operations to Mahindra and Mahindra Ltd (M&M), underscoring the US company’s long-drawn struggles to make a bigger dent in the world’s fourth-largest automobile market, Mint reported citing to a joint statement issued by the two companies. Ford will transfer its entire business in India, barring an engine plant in Sanand, Gujarat, and its Chennai-based Global Business Services unit, to a new joint venture company controlled by M&M. The Indian automaker will own 51% in the new entity while the remainder will be held by Ford. M&M will invest 657 crore in the JV, which has a likely equity value of 1,289 crore. M&M will induct all of Ford’s India based employees and vehicle plants located in Sanand and Chennai, subject to regulatory approvals. The transaction is expected to be completed by mid-2020, after which the JV will become operational. Ford’s move is aligned with its global strategy to mitigate risks by withdrawing from tough markets where it has failed to successfully grow profits over time. In June, Ford said it would restructure its European operations, shutting several production units and laying off about 12,000 people by 2020-end.

Khatabook raises fresh funds from GGV, others

Khatabook, a mobile app that enables small and medium enterprises (SMEs) track business transactions, has raised a $25 million ( 178 crore) Series A round from GGV Capital, partners of DST Global, RTP Ventures, Sequoia India, Tencent and Y Combinator, Mint reported. Besides, more than 20 angel investors, including Amrish Rau, Anand Chandrasekharan, Deep Nishar, Gokul Rajaram, Jitendra Gupta, Kunal Bahl, and Kunal Shah, also participated in the round. With this round, Khatabook has raised $29 million since its inception in December 2018. It was part of Surge, Sequoia India’s accelerator programme for early-stage startups. Y Combinator and Info Edge also invested in the company. Khatabook has over 2.9 million active businesses and over five million registered users. The app is available in 11 Indian languages, besides it is used by merchants in Nepal, Pakistan and Bangladesh. Its client base includes kirana stores, mobile recharge shops, garment dealers, restaurants and travel agents. The Khatabook team plans to launch other products for micro, small and medium enterprises, or MSMEs, in the next few months.

Abu Dhabi’s Masdar to Buy Stake in Hero’s Green Energy Arm for $150m

Making its entry into renewable energy space in India, Abu Dhabi government-owned energy company Masdar Clean Energy is all set to acquire about 20% stake in Hero Future Energies, the renewable energy arm of the Hero Group of the Munjal family, for $150 million, The Economic Times reported citing two people aware of the development. Post the transaction, Masdar will own 20% stake, IFC will own 27% stake while the rest will be held by promoters. International Finance Corp (IFC), the private sector investment arm of World Bank, invested $125 million in Hero Future in 2017. Masdar is advised by BNP Paribas while JP Morgan advised Hero Future in the stake sale process. The deal will be signed by this week. Launched in 2012, Hero Future Energies is led by Rahul Munjal, the elder son of Hero MotoCorp founder late Raman Munjal. Hero Future, present in in 10 states of India with operating asset base across wind, solar PV (grid connected) and rooftop plants, has 1,200 MW capacity of installed solar and wind power while another 500 MW is being built and 300 MW more is in pipeline. Hero Future Energies (HFE) has presence in 10 states of India with operating asset base across wind, solar PV (grid connected) and rooftop plants.

France’s GeoPost in Talks to Acquire up to 25% More in DTDC Express

French government-backed logistics firm GeoPost, which owns 42% of DTDC Express, plans to acquire a majority stake in the Indian courier service provider. It is in initial stages of discussions to buy another 20-25% stake in DTDC, valuing the company at 3,000 crore ($450 million), The Economic Times reported cititwo people aware of the development. In 2013, GeoPost had bought 40% stake in DTDC from investor Reliance Equity Advisors, the private equity arm of Reliance Capital, for $25 million, and subsequently increased its shareholding in the Indian company. The parcel delivery network of GeoPost, DPDgroup, is the second largest in Europe with a revenue of €7.3 billion in 2018. ICICI Securities is advising the DTDC management on the sale process while GeoPost is being advised by BNP Paribas. However, it is not sure if a deal between DTDC and GeoPost will be materialised as the French major has differences over the expected valuation of DTDC. Parallelly, DTDC is also considering an option to launch an initial public offering.


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