K.M. Birla: The Cemco deal went through JIT

Remember the Aditya Vikram Birla Group's play for the cement business of L&T that started with the group acquiring Reliance's 10 per cent stake in L&T and ended with L&T hiving off its cement business into a separate company, Ultra Tech CemCo, and Grasim (part of the A.V. Birla Group) acquiring a majority stake in this for some Rs 2,200 crore? Remember the L&T management's initial opposition to the deal? Well, given that Grasim's turnover is Rs 6,163 crore (2003-04), were Kumar Mangalam Birla to have made his play for L&T's cement business in 2005, he would have had to contend, apart from the opposition of the L&T management, with the Competition Commission.

That's because the guidelines for the Commission stipulate that any M&A activity involving a company with a turnover exceeding Rs 4,000 crore (or where the merged entity will have a turnover exceeding Rs 12,000 crore) will need to be cleared by it. The Commision, the guidelines add, will have the power to investigate and decide whether the merger or acquisition is inimical to competition.

Analysts point to the fact that henceforth, any international player (of a certain size) that wants to acquire an Indian company will also have to take the prior approval of the Commission; even global M&A deals may require a clearance from the Commission if they involve subsidiaries with a turnover exceeding Rs 4,000 crore in India. For instance, any global acquisition by Unilever, parent of HLL, will now need to be cleared by the Commission. "It (turnover) is a good starting point and we can move to the marketshare criteria when more data is available," says Kaushik Dutt, Partner, PricewaterhouseCoopers. Well, given that the US and the EU have their own versions of the Competition Commission, it makes sense for India to have one too. As long as it doesn't get in the way of business, that is.

-Ashish Gupta

Tata Calling
VSNL bags Tycom Global Network.

Tata Group Chairman Ratan Tata: Calling Tycom

In what must come as a boost to the Tata Group's Integrated Telecommunications play, one of its companies Videsh Sanchar Nigam Limited (VSNL) acquired Tyco International's undersea cable network, Tycom Global Network. The undersea cable arm, valued at $3.5 billion (Rs 16,100 crore at today's exchange rates) at the peak of the dotcom boom had been in play for some time, with VSNL, and another Indian firm Reliance emerging the frontrunners. Reliance had earlier, in January this year, acquired another global undersea network, Flag Telecom, for some $211 million (Rs 970.60 crore at the then exchange rates). On the face of it, VSNL seems to have struck a better bargain than Reliance. Tycom's network is 60,000 km long and spans three continents, Asia, Europe and the US, and VSNL acquired this for $130 million (Rs 598 crore). Flag's network is 50,000 kilometres long. The acquisition of Tycom's network will help the Tata company serve enterprise customers (read: call centres, business process outsourcing firms and software services firms) that need high-speed bandwidth to us and European markets. The deal will also help the Tata company become a global TELCO (it previously controlled connectivity only in parts of South and West Asia and parts of Europe). "We will marry the IT skills of the Tata Group with the telecom skills of VSNL to become a global player," says Kishore Chaukar, Managing Director, Tata Industries. "We will carry out whatever acquisitions we need to do to get there." Well, Tycom's a start.

-Priya Srinivasan

Access For The Masses
A new hybrid PC promises just that.

A year ago, chip-maker AMD forged a consortium of five technology multinationals and several telcos from India, China, Mexico, Russia and Brazil (the BRIC in the report of the same name plus Mexico) to work on a project, titled rather evocatively, EMMA. The goal was to design an Emerging Markets MAchine (EMMA, see?) that could cater to the "bottom of the pyramid", a term popularised by management guru C.K. Prahalad whose latest book (and long-term obsession) revolves around making money by selling to the masses, and one that Ajay Marathe, President, AMD India, borrows to explain the product and the concept.

The product in question was launched in India last week; it goes by the name Personal Internet Communicator (PIC), and is essentially a compact box with a keyboard and mouse (the monitor costs extra) and runs on an OS from Microsoft (ram and optional monitor from Samsung, hard disk from Seagate, applications from a us-based start-up). AMD India has bundled all this in a 10-gb hard disk, 128-mb ram product that it sells to telco Tata Indicom (for between $185 and $249, Rs 8,510 and Rs 11,454). The telco then sells the box to the retail consumer, bundled with a Tata Indicom phone and a broadband connection in a financed deal where the down payment, according to Sashi Kalathil, Head, Broadband Business, VSNL, will not exceed Rs 2,500.

AMD, says Marathe, plans to manufacture PIC in India in association with contract manufacturer Solectron (its Indian arm is called Solectron Centum). "We want to promote manufacturing and add manufacturing jobs here," he says, adding that all this is part of the company's vision, branded 50/15, of increasing connectivity to 50 per cent of the world's population by 2015. Well, if PIC clicks, it should also help the company break Intel's hegemony over the Indian market.

-Priya Srinivasan