PPP Club, IIM Calcutta

Current Affairs Capsule

Recent Acquisitions
Reliance, MakeMyTrip, PayU, Apple

Page 1
 PPP Club, IIM Calcutta
Current Affairs Capsule

Recent Acquisitions

Reliance acquires Aircel

Anil Ambani led Reliance Communications (RCom) signed definitive agreements with
Maxis Communications Berhad (MCB) for the merger of wireless businesses of Aircel
Limited with itself, making it the largest-ever consolidation in the Indian telecom sector.

It is a JV with 50:50 partnership with MCB which is has highest market share in Malaysian
Telecom market largely due to its service competency (so much so that it charges way
higher than other players in market).

The RCOM-Aircel combination will create a strong operator clearly ranked :

amongst Indias top 4 telcos by customer base and revenues
amongst top 3 operators by revenues in 12 important circles
second-largest spectrum holding company

The merged entity will be one of Indias largest private sector companies, with an asset
base of over Rs. 65,000 crore ($9.7 billion) and net worth of Rs. 35,000 crore ($5.2 billion).
As a leader in 12 circles it will be a strong challenger to Kumar Mangalam Birla led Idea
Cellular.

Why did it happen?

Indias telecom industry is expected to embark on a wave of consolidation as smaller

companies find it difficult to cope with high spectrum costs and an inability to provide
nationwide services at a price that makes business sense. These pressures have
intensified with new entrant Jio providing free voice calls for life and charging less for
data than incumbents, undercutting the key source of revenue for phone companies.

They (RCom and Aircel) have both been voice players, not data, which is the market
opportunity today. To be able to transform to a data player will need serious financial
and operational commitment.

Impact on market
Airtel has started offering plans like 10GB for Rs. 259 (affectively Rs 26/GB).

Page 2
 PPP Club, IIM Calcutta
Current Affairs Capsule

MakeMyTrip - GoIbibo merger

The combined entity will bring together top brands in the consumer travel space in India
including MakeMyTrip, Goibibo, redBus, Rightstay and Ryde under one umbrella.

Although neither company have indicated the value of the combined entity, early
estimates peg the deal at $1.8 billion.

At the closing, MMYT shareholders will own 60% whereas Ibibo shareholders will get a
40% stake, making Naspers and Tencent the single largest shareholder in MakeMyTrip.

Market Scenario

Ibibo has enjoyed robust performance across business segments, taking transactions to
23.2 million. KPI on the basis of key mobile metrics of MMYT also stood steady at 27.5
million app downloads as of quarter ending June 30. The merger will further strengthen
its leadership team and management depth in the consumer travel space in India.

In a highly under-penetrated and fragmented market, the merged entity can truly become
a one-stop-shop for all Indian travellers. (Services offered include Flight, Rail Bus & Tickets,
Route Planner, Cab Service, Hotels & Packages, Mobile Solutions and Forex)

The deal will also make arch rivals partners to fight younger startups like Cleartrip,
Booking.com and Expedia in the rapidly growing Indian travel market.

The deal signals impending consolidation in the countrys highly competitive

consumer internet sector.

Discounts might take a backseat with a monopoly like situation in the market. (for ex -
Flipkart was able to cut discounts by acquiring both Myntra & Jabong thus taking pole
position in the fashion segment)

The likes of Oyo might also be affected if MMT and goibibo also begin standardisation
of hotels under their brand names aggressively. MakeMyTrip aggregates budget hotels
under the brand name RightStay, while ibibo operates GoStays.

Page 3
 PPP Club, IIM Calcutta
Current Affairs Capsule

Payu buys Citrus Pay for $130 Mn

In an all-cash-deal, PayU acquired Citrus Pay, in what is said to be the largest cash exit for a
payments company in India till date.

The deal will create a larger footprint for PayU in India with over 30 million customers and
projected to process 150 million transactions in 2016 worth $4.2 billion.

Today, both companies offer digital wallet services essentially a way of topping up and
spending money online and on mobile for people who may not have payment cards
and payment services for online and in-store merchants.

Why did it happen?

Firstly, all of the companies in this space are tapping into the fact that there is low credit
card and bank account penetration in the country, and yet the appetite to buy things
online and in person is growing, thanks to an expanding middle class and the growth of
smartphone penetration to make transactions. (BCG estimates digital transactions will hit
$500 billion by 2020, representing tenfold growth in the next 4 years.)

And secondly, to compete in the market, against the likes of Paytm.

Whats in store?

The agreement enables PayU to quickly bring additional innovative financial services to
market for its business and consumer customers.

PayU is expected to strengthen its existing franchise in e-commerce, and grow vertical
market leadership in the airline and telecom industries on the back of Citrus Pays
platform.

Citrus Pay founder Jitendra Gupta will drive PayUs Fintech foray into credit through Citrus
Pays Lazypay, while Shailaz Nag, PayU co-founder, will focus on new areas of growth
through bank alliances.

With the fight in the payment space getting heated, mergers and acquisitions or alliances
seem like an outlet to beat competition and stay ahead in the game.

Page 4
 PPP Club, IIM Calcutta
Current Affairs Capsule

Quikr acquires StayGlad (5th acquisition in 5 months)

Online classifieds firm Quikr has acquired StayGlad, an online beauty services startup
founded in 2015. This is Quikr's fifth acquisition in five months and 3 of these were in on-
demand beauty services.

Quikr has been on an acquisition spree since May when it acquired beauty services player
Salosa. It then branded Salosa as AtHomeDiva in July & acquired Zapluk in August.
AtHomeDiva offers on-demand, in-home beauty services in six cities (mostly metros).

Quikr, which is valued at $1.2 billion, also acquired hiring platform Hiree in July and
vehicle maintenance startup Stepni early September & real estate portal Commonfloor.

PD Sundar, head of QuikrServices, said, "On-demand beauty is one of our fastest growing
service categories. With well more than half of our consumers coming back to us with
bigger ticket sizes, the demand is strong. We want to continue ensuring that we maintain
the high standards of quality."
He also said, StayGlad is one of the largest and highest quality players in beauty
services with a 70 percent customer repeat rate, which makes them a great fit for our overall
vision for AtHomeDiva.

Apple Aquires Tuplejump

Apple quietly acquired a little-known Hyderabad-based startup a few months ago for an
undisclosed amount. Tuplejump is a machine-learning company that simplifies the
handling of big data. The word is that it is a part of the Apples exploration in the AI
(Artificial Intelligence) space.

Tuplejump is Apple's first acquisition in India. Including this, the iPhone-maker has bought
three artificial intelligence companies this year, the others being Turi and Emotient.

Focus on Artificial Intelligence

Apple's AI-based assistant Siri is facing increasing competition from similar services out of
Google, Amazon and Microsoft.

Apple was particularly interested in FiloDB, an opensource project that Tuplejump was
building to efficiently apply machine learning concepts and analytics to massive amounts
of complex data right as it streamed in.
Inclination towards IoT (Internet of Things), which has applications in various
sectors, might also be a candidate worth considering here.

Page 5