Looking back on our M&A deals of the year

By the time the new millennium rolled around, Asian companies participating in auctions for Western assets was no longer a rarity. Asia had a number of home-grown companies which were globally competitive and keen to expand beyond their own geographical boundaries. Banks in the region were flush with funds and eager to support these global aspirations. And a series of cross-border acquisitions by Indian companies like Dr. Reddy's and Tata Tea, as well as Chinese companies like Lenovo and CNOOC followed.

But Tata Steel's $12.2 billion acquisition of UK-based steel manufacturer Corus in 2007 still created waves in financial markets across the globe. Tata Steel went after a large asset and did so in a competitive situation, bidding against Brazilian steel major CSN. The $7.4 billion financing put in place to fund the deal was the largest ever non-recourse facility raised by an Asian sponsor.

Critics of the deal point to the fact that Tata Steel was caught back-footed by the global downturn, was unable to refinance the loans it raised according to plan, and that extracting value out of the acquisition has been difficult. And they could well be right. But in awarding the takeover as our Deal of the Year in 2007 we were driven by the audaciousness of Tata Steel in pursuing Corus, its ability to raise bank finance and the fact that this deal made a number of other Asian companies more acquisitive and ambitious. And those factors hold as true today as they did then.

The following year, 2008, was a year when investment banking fees were driven by M&A. Debt markets started to show signs of nervousness in the middle of the year and equity markets soon followed suit. But Asian companies -- Chinese ones in particular -- which had begun the year with some large M&A announcements continued in the same vein, even through the subprime-sparked liquidity crisis.