ICICI Securities Ltd., the investment-banking arm of India’s biggest private lender, formed a partnership with Japan’s GCA Savvian Group Corp. to advise on cross-border mergers between the two countries.
ICICI Securities’ capital markets business will also help Tokyo-based GCA Savvian’s clients with rights issues, open offers and delistings in India, the two companies said in a press release. GCA Savvian earlier had a partnership with Mumbai-based Kotak Mahindra Bank Ltd. (KMB) that ended last year.
The alliance comes after the volume of mergers and acquisitions involving Indian companies slid to $25.5 billion this year, the lowest since 2009, according to data compiled by Bloomberg. The value of Indian acquisitions by Japanese companies has fallen to $359 million so far in 2013, down from a record $7.52 billion for all of 2008.
Deal activity has decreased since Daiichi Sankyo Co.’s 2008 acquisition of Ranbaxy Laboratories Ltd. for $4.6 billion. The Indian drugmaker agreed in May to pay $500 million to resolve fraud allegations, and Daiichi said it will pursue “legal remedies” against Ranbaxy’s former owners for allegedly hiding details of U.S. investigations into the company. The former owners have denied the allegations.
Japanese companies in industries from cars to electronics have been expanding in India, as demand at home slows because of an aging population. Toshiba Corp. agreed in September to buy Vijai Electricals Ltd.’s transmission and distribution business for $200 million. Last year, Sony Corp. spent $271 million to increase its stake in Indian television network operator Multi Screen Media Pvt.
Financial firms from Japan have also been active. Kotak Mahindra Capital Co. formed a strategic alliance in December 2012 with Sumitomo Mitsui Banking Corp. and SMBC Nikko Securities Inc. Nippon Life Insurance Co., Japan’s biggest life insurer, spent $288 million last year for a minority stake in Reliance Capital Ltd.’s asset-management unit.
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