China, Japan, India Law Firms Rule Asia Pacific M&A Structuring

Oct. 30 – A report by Mergermarket has identified Indian law firms as the big new kids on the block in terms of M&A activity with three Indian law firms having completed deals in excess of US$3 billion this year.

Indian law firm Desai & Diwanji & Co (D&D) features in the top 10 across the region. With 14 deals worth more over US$3.6 billion, it ranked eighth in the region. D&D advised Quippo Telecom Infrastructure in its acquisition of Wireless IT Service, and was also involved in advising Avendus Capital and WL Ross in the acquisition of Satyam Computer Services by Tech Mahindra.

The other large transactions where D&D was involved was Shantha Laboratories’ acquisition by Sanofi Pasteur and the sale of SPS’s steel facility to Essar Steel. “Things were quiet from January to May. Starting June, we are seeing a significant increase in the flow of transactions,” said Vishwang Desai, senior partner at D&D quoted in the report.

He added the second-half of the year will witness more deals. Among other Indian firms, Khaitan & Co was involved in 13 deals aggregating US$3.23 billion, while Amarchand Mangaldas & Suresh A Shroff & Co worked on nine deals worth US$3.03 billion.

Khaitan & Co was a part of Bahrain Telecom’s investment into S Tel as well as NTT DoCoMo’s investment in Tata Teleservices. It was also involved in Sterlite Industries’ acquisition of Asarco. “We feel that the effect of slowdown is almost over, now we are witnessing large foreign investment in the domestic market. Many international investors are looking at new opportunities. All those deals, which were abandoned or jeopardised because of the slowdown are now being revived because of increased confidence in the India Story,” said Rabindra Jhunjhunwala, senior partner with Khaitan & Co.

The report also said between January 1 and September 22, China topped M&A activities in the region with a 38.8 percent market share. It was followed by Japan with 23.1 percent and Australia with12.7 percent while India stood fourth with a 9.7 percent share.

Chris Devonshire-Ellis, senior partner of Dezan Shira & Associates in Mumbai and publisher of 2point6billion.com comments: “After the failed Coke Haiyuan deal, many predicted China M&A as being dead. That was never the case as firms on the ground in China well know. ”

He says the days of regular billion dollar deals are over, and M&A activity will be concentrated on the US$200-300 million range. He adds: “This is as true in China as it is in India and we remain bullish about M&A prospects in the region for 2010. We are seeing more calls for due diligence work at our practice and this is obviously news that supports the consensus the worst is over in the downturn. A lot of businesses are good value right now and need money for expansion.”