Mukesh Ambani is preparing to materialize another Indian takeover story that would be called as the mother of all acquisitions. Earlier, the Tata’s $12 billion take over of Corus was said as the one of the biggest deal in the world.
Now, Mukesh Ambani is gearing up for a mega global takeover that will boost RIL into the next orbit in both size and reach. The deal would be worth of anything between $22 billion to $30 billion.
The Times of India had reported earlier that Reliance may target the US petrochemical giant Dow Chemical. It was also reported that world’s three biggest private equity funds such as Blackstone, KKR and Carlyle may plan to take the US giant. Now, Mukesh Ambani may have a thought to go in the same race.
However, the US giant Dow is not the sole target in Mukesh’s mind as there are some other global petrochemical giants too he is eyeing at. Mukesh Ambani is all set to enter in global market with a major takeover story as Tata has done earlier.
RIL is currently handling three mega projects such as a Rs 25,000 crore refinery at Jamnagar; a Rs 50,000 crore retail dream and three special economic zones (SEZs) for the investment of Rs 50,000 crore.
Now, Reliance needs to go for a major takeover at the global level because it would give RIL easier access to global markets and offer him cutting-edge technology for speciality chemicals business.
Now, the bigger question is that what would be the source of money for Mukesh to go for such kind of takeover. The Economic Times has reported the possible source of the money for the probable takeover.
It has reported that 12% of RIL stock was placed in a trust after the Reliance Petrochemicals ‘ merger with RIL in 2000.
On the same line, another 2% of RIL stock would be accounted after the almost cleared merger of IPCL with RIL. Acoounting together the trust money, it touches Rs 27,000 crore mark.
Mukesh Ambani may have a plan in mind to put the sum of Rs 27,000 crore in a special purpose vehicle (SPV) to bring a partner on a 50:50 basis to invest an equal amount of money.
Then the SPV, as a debt-equity ratio of one for one, would raise another amount of Rs 50,000-odd and would make the total corpus to over Rs 1 lakh crore. With this amount Mukesh Ambani may go for the mother of all acquisition plan.
