Reliance Infra buys Pipavav Defence for up to Rs 2,082 cr

RINFRA open offer for Pipavav Defence at Rs 66/share. Hero MotoCorp and M&M were also reportedly in race for the firm

In the biggest deal in the defence sector, billionaire Anil Ambani-led Reliance Infrastructure announced acquisition of controlling stake in Pipavav Defence and Offshore Engineering for up to Rs 2,082.3 crore, a deal for which Hero MotoCorp Ltd and Mahindra & Mahindra Ltd were reportedly also in the race. Reliance Infra will buy 18 per cent stake from promoter group led by Nikhil Gandhi at Rs 63 per share, aggregating to Rs 819 crore. It will make an open offer for an additional 26% shares at Rs 66 apiece, totalling Rs 1,263.3 crore. In case the open offer fails, Reliance Infra will acquire additional shares from promoters to ensure its shareholding is not less than 25.10 per cent. Promoters at present hold 44.50% stake in Pipavav Defence, which is reportedly is looking at debt recast. The Anil Ambani Group, which has announced foray into defence manufacturing, will buy 13 crore equity shares from promoters together with sole management control. The acquisition would be done by Reliance Infrastructure, together with its wholly owned subsidiary Reliance Defence Systems Pvt Ltd. Pursuant to the buyout resulting in a change in management and control of the Pipavav, Reliance Defence Systems Ltd, a subsidiary of Reliance Infrastructure, made an open offer to acquire 26 per cent from public shareholders of the company at Rs 66 per share. "The transaction is subject to certain conditions precedent and various statutory approvals," the statement said, adding Ambani will become Chairman of Pipavav Defence. Commenting on the transaction, Ambani said, "This is a unique opportunity for Reliance Group to participate in Prime Minister Narendra Modi's 'Make in India' programme for the high growth defence sector." "We are confident that our strategic investment will create long term value for all stakeholders," he said.