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Each week, we report instances where the money junky hedge funds, private equity groups and the already big companies swallow another piece of the global economy. Here are some more of what the BIGS have been gobbling up and how the Bigs keep getting bigger and the rich keep getting richer.
TWO MAJOR INDIAN LENDERS MERGE
India’s largest private-sector bank and the country’s largest mortgage lender are merging to take advantage of surging demand in India for home loans.
When the HDFC Bank and its affiliate, the Housing Development Finance Corp., combine, the new entity will have a loan portfolio valued at about $235 billion.
The two companies now will be able to more easily sell products to each other’s roster of customers, promoting credit cards to mortgage borrowers and mortgages to customers with auto loans, for example.
The bank will issue enough new stock to pay for the purchase of the mortgage company, shareholders of which will own 41 percent of the combined entity.
The deal values the mortgage company at about $60 billion.
HDFC Bank is India’s third most valuable public company, with 68 million customers and a market capitalization of about $121 billion, at the close of trading on 5 April.
India’s nonbank financial institutions are now being regulated more strictly, more similar to banks, but have more difficulty funding themselves. The merger eliminates both difficulties for the Housing Development Finance Corp. by making it part of the bank.
The new entity will use its larger resources to expand its range of loans, including to projects addressing government priorities such as farming and affordable housing, bank chair Deepak Parekh said in a statement.
MERGER WILL CREATE WORLD’S LARGEST OIL TANKER COMPANY
Frontline Ltd. and Euronav NV will merge in an all-stock deal that will value the combined entity at $4.2 billion and create the world’s largest oil tanker fleet, encompassing 69 supertankers and 77 smaller tankers.
Norway-based Frontline will exchange 1.45 shares for each share of Euronav, which is headquartered in Belgium.
Euronav shareholders will own 59 percent of the new company, Frontline stockholders the balance.
Frontline’s share price slipped 7.6 percent on the news; Euronav gained 6.8 percent.
After regulatory approval, the new entity will be named Frontline and be led by Hugo de Stoop, Euronav’s current CEO.
The merger is among the largest in the tanker industry, which slumped along with global oil demand during the COVID War. The new entity will control about 10 percent of the world’s crude oil supertankers.
After booking a profit of $473.2 million in 2020, Euronav lost $338.8 million in 2021. Frontline reported $413 million in profit in 2020 and held its loss to $11 million last year.
BLACKROCK MULLS BID FOR ATLANTIA
U.S. private equity firm Blackrock is considering making a takeover offer for Atlantia, an Italian company that manages airports, toll highways, and other infrastructure across Europe and the Americas.
Atlantia owns majority shares of airports in Cannes, Nice, St. Tropez, and Rome, highways in 11 countries including the U.S., and operates toll roads in 24 countries.
Blackrock is crafting a bid in collaboration with Edizione, a holding company guiding the Benneton family’s fashion fortune and that already owns a third of Atlantia, people familiar told the Financial Times.
The family has been seeking a buyer for its Atlantia stake since a bridge collapsed in Genoa in 2018. An Atlantia subsidiary was responsible for maintaining the bridge.
The collapse killed 43 people and prompted Italy’s government to threaten to ban Atlantia from doing business in the country.
Blackrock may face a rival offer for Atlantia from Florentino Perez, chair of Grupo ACS, an international construction conglomerate, who is working with Brookfield Asset Management and Global Infrastructure Partners on a takeover bid.
News of a possible bidding war sent Atlantia’s share price up 10 percent to a market value of about $17 billion.