India's energy giants in global hunt for deals
Thursday, 21 January 2010
MUMBAI, Jan 20 (AFP): Cash-rich Indian energy groups are looking to flex their new-found muscles with global acquisitions as the fast-growing country joins China in the hunt for vital resources, analysts say.
"India's oil and gas sector will be a force to reckon with this year for cross- border deals." said Sidharth Punshi, India head of global investment bank Jefferies.
Reliance Industries, controlled by India's richest man Mukesh Ambani, has generated two billion dollars via stock sales since September and is expected to keep raising cash to boost its reserves and fund eventual acquisitions.
The company, India's largest by market capitalisation, already has Netherlands-based chemicals group LyondellBasell in its sights.
But Lyondell, which does most of its business in the United States, has so far resisted a takeover offer from Reliance worth an initial 12 billion dollaRs
"There is no doubt Reliance is looking to acquisitions (beyond Lyondell)." said energy analyst Deepak Pareek at Mumbai's Angel Broking.
A deal between Reliance and Lyondell, the world's third- largest chemicals maker, would create a global energy and chemicals giant, with annual revenues estimated at near 80 billion dollaRs
Reliance had no comment to make on its future takeover strategy when contacted by AFP.
But Pareek said the speed with which Reliance has raised money has raised eyebrows.
"Several local key projects have been completed, so Reliance can focus on acquisitions." he added.
For Reliance, an overseas acquisition would diversify its assets-it is almost entirely focused on India at present-and would launch it as a global competitor to established European, US or Chinese rivals.
"India's oil and gas sector will be a force to reckon with this year for cross- border deals." said Sidharth Punshi, India head of global investment bank Jefferies.
Reliance Industries, controlled by India's richest man Mukesh Ambani, has generated two billion dollars via stock sales since September and is expected to keep raising cash to boost its reserves and fund eventual acquisitions.
The company, India's largest by market capitalisation, already has Netherlands-based chemicals group LyondellBasell in its sights.
But Lyondell, which does most of its business in the United States, has so far resisted a takeover offer from Reliance worth an initial 12 billion dollaRs
"There is no doubt Reliance is looking to acquisitions (beyond Lyondell)." said energy analyst Deepak Pareek at Mumbai's Angel Broking.
A deal between Reliance and Lyondell, the world's third- largest chemicals maker, would create a global energy and chemicals giant, with annual revenues estimated at near 80 billion dollaRs
Reliance had no comment to make on its future takeover strategy when contacted by AFP.
But Pareek said the speed with which Reliance has raised money has raised eyebrows.
"Several local key projects have been completed, so Reliance can focus on acquisitions." he added.
For Reliance, an overseas acquisition would diversify its assets-it is almost entirely focused on India at present-and would launch it as a global competitor to established European, US or Chinese rivals.