Big companies acquire the smaller ones to strengthen their existing assets because, why start from scratch when you can aquire and fill the loopholes, and why engage in a power battle with your biggest competitors when you can have a monopoly together!
The year 2017 witnessed some of the biggest mergers in the Indian market. Business reach was expanded, and companies kept posing and increasing competition in the market.
Let’s have a look at the 5 major Mergers and Acquisitions that took place in 2017 in India:
- Axis Bank acquires FreechargeFreecharge Founded in 2010 by Sandeep Tandon and Kunal Shah, was acquired by Axis bank in July 2017 at a value of $60 mn, which was earlier acquired by Snapdeal in 2015. The 200 member team of Freecharge has also joined Axis Bank and Sangram Singh was named the CEO. This acquisition has allowed the bank to leverage Freecharge expertise as well as its user base. Moreover, it has doubled the customer base of Axis Bank, as earlier Freecharge had a customer base of 50mn.
- Flipkart’s acquisition of Ebay IndiaEbay is now an independent entity as a part of Flipkart. This came after Flipkart raised 1.4 billion of funding in August 2017, in the seventh round from Telnet, Microsoft and Ebay. And as per the signed agreement, the Flipkart customers will have access to the wide range of products from eBay and eBay customers will have access to Flipkart’s products too, which will help Flipkart increase its sales globally. Ebay came to India in 2004, and being a early starter, it had a unique standing in the Indian market, which was a good addition to Flipkart’s position in the market.
- Airtel-Telenor MergerThe merger of Airtel and Telenor took place after the SEBI approved the merger in June. As per the agreement, Airtel took over it’s spectrum in seven circles -Bihar, Andhra Pradesh, Maharashtra, UP(east), UP(west), Assam. Airtel has also acquired the customer base, employees, licences and operations of Telenor and hence increased its network from the merger.
- Vodafone-Idea MergerTwo of the biggest players in telecom market merged back in April 2017, to create the country’s largest telecom operator with a worth of more than 23 billion and with a 35% share of market. The cost reduction due to merger will help in strengthening customer base and providing high quality service to clients. The telecom will be able to achieve lower capital expenditure due to higher spectrum availability and larger single-radio access network along with re-deployment of overlapping equipment from rationalised sites.
- Wipro Ltd and InfoSERVER S.A.Wipro completed the acquisition of the Brazilian IT service provider InfoServer on April 10, 2017 for USD 8.7 Billion. This acquisition has expanded Wipro’s presence in the Latin America market as InfoSERVER was mainly focussed on the Brazilian market and provided application development and deployment. The two decade old InfoServer, counts some of the largest Brazilian Banks as it’s clients, and hence Wipro can expand its knowledge and presence in the highly competitive banking, financial and insurance market.