M&A deals in telecom sector in FY'08

M&A deals in the telecom sector in FY'08 were worth more than $9.15b ($8.065b by foreign players), according to Assocham[1].

Consolidation in the telecom sector accounted for more than one-third of total M&A deals in India in FY'08.

Global merger volume declined to a third in FY'08, primarily due to the lack of credit.

A few of the notable deals in the telecom sector are as follows:

1. Japanese major NTT DoCoMo - 26% stake - Tata Teleservices - $2.7b - largest of around 20 deals this year - Pan India GSM and CDMA license

2. Turkcell, leading Turkish telecom company and Europe’s third-largest operator by subscribers - 51% stake - Datacom Solutions - $2.2b (expected) - currently in process

3. Italian multinational, Telecom Italia - 49% stake - Unitech Telecom - $2 billion
{revised to Telenor - 67.25% - Unitech Wireless - $1.36b [3]} - Pan India GSM License

4. Dubai-based Emirates Telecommunications Corp (Etisalat) - 45% stake - Swan Telecom - $900 million (all cash) - Swan Telecom had spectrum in 10 out of 22 circles - GSM License in 13 circles

5. Idea Cellular - 40.8% stake - Spice Communications - $679 million - among the major domestic deals

6. Reliance Globalcom Limited, subsidiary of India's largest integrated telecom Service provider Reliance Communications - Vanco Group, London based global managed network services provider - $365 million - largest offshore deal

7. Bahrain Telecom (Batelco) - 49% stake - S Tel (Chennai-based) - $225 million - GSM license in 6 C circles

A few more deals are as follows:

1. TMI - Idea Cellular - 14.99% stake in Idea by swapping its 39.2% in Spice - $1.7 billion - Pan India GSM license

2. Sistema - Shyam - Acquired 51% stake initially. Has raised its stake since then to 73.1% - $58.1 milion for 51% stake - At time of acquisition, had license in Rajasthan only. Later was awarded license for pan India (CDMA)

Sources:
[1] http://www.assocham.org/arb/aep/AEP_telecom-article_Dec2008.pdf
[2] http://economictimes.indiatimes.com/News/News_By_Industry/Telecom/Middle_East_telcos_dial_India_for_share_of_3G_pie/articleshow/4044511.cms
[3] http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSLH25073620090317
[4] Anchor Report: Telecoms India: Nomura Singapore Ltd: 15 April 2009