Indian Billionaire Anil Ambani’s Reliance Infra acquired Pipavav Defence in a deal signed in March 2015. It is the biggest deal in Defence sector in India. Reliance Infrastructure Limited announced acquisition of controlling stake in Pipavav Defence and Offshore Engineering Company Limited for Rs 2082 Cr.
Reliance Infra will buy 18 percent stake from promoter group led by Nikhil Gandhi at Rs 63 per share, implying a valuation of Rs 819 crore. Reliance Infrastructure trumped Mahindra & Mahindra and the Hero group which were also in the running for Pipavav.
Reliance Defence Systems, a subsidiary of Reliance Infrastructure, will also make an open offer to acquire another 26% for Rs 66 per share. If the open offer is successful, the Reliance Group will have to fork out Rs 1,263 crore for a 26% stake, taking the total acquisition cost to Rs 2,082 crore.
Anil Dhirubhai Ambani, chairman of Reliance Group, will become the chairman of the Pipavav Defence company, which will be renamed Reliance Defence.
The Gandhis are known for building large infrastructure projects and selling them off while retaining a minority stake. Pipavav Defence has one of the world’s largest infrastructure facilities — spread over 841 acres of land in the Gulf of Cambay, Gujarat, including 250 acres developed to shipbuilding. The infrastructure is capable of building submarines and aircraft carriers on the back of a technological alliance with Swedish Defence Company SAAB.
Last year, the government had increased FDI cap in the Defence projects to 49 percent to boost investment inflows in Defence manufacturing.
So one more proud moment for Gujarat, by Gujarati…
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