Relying On Tricky Buys

The Indian acquisition story has made yet another interesting turn. After Infosys and ONGC we are now looking at two significant buys by another Indian company. News that the Anil Dhirubai Ambani wing of Reliance’s formidable fleet has set its sights on ace director Steven Spielberg’s 2.4 Billion Dollar movie company Dreamworks has been around for the past few weeks. But a recent story that the group is also interested in buying the English football club Newcastle United indicates that the younger Ambani has no qualms about entering into unchartered territories.

For years before the Reliance split Anil Ambani had been known to negotiate and acquire companies that have been strategic additions to the Reliance armory. The split has however given Anil Ambani the freedom to pursue business opportunities in avenues the company doesn’t have a foothold in. Of course it helps to have all that money.

Strategically speaking, the Reliance Anil Dhirubai Ambani Group (ADAG) have shown their interests to diversify into other business oppurtunities. Dreamworks is one of them. Even though ADAG will not gain total control over the company if the deal goes through, they will have significant clout in the decision making process of the company. ADAG have said that they are interested in investing about half a billion Dollars in Dreamworks with an aim to make money spinning blockbusters.

The deal was on the fast track till a few weeks ago. As of today there is a chance that ADAG might not be able to invest in Dreamworks but Steven Spielberg has himself indicated many a time that in all probability Dreamworks will end up partnering ADAG’s Reliance Entertainment.

With the launch of their own DTH service Reliance BIG TV and another host of companies in their entertainment basket, the potential to grow for Reliance is enormous.

Now with recent news that Anil Ambani might take over the English Premier League football club Newcastle United for a little more than Two Hundred Million Pounds, other  Indian companies with cash reserves might well be inspired to take risks the way ADAG have.

The news that the ADAG group is interested in buying Newcastle united has been doing the rounds. The UK’s Sky Sports has quoted a spokesman for Anil Ambani saying that they aren’t interested in buying the English football club. Statements like these are often made from time to time during which one company is trying to purchase another in an effort to keep all potential deals under wraps.

Anil Ambani has shown a keen interest in owning his own football club. Indications have come in that as of today key members of the ADAG team have landed in England to negotiate the purchase of a football club from their respective owners. If the Newcastle deal were to go through it will be the second instance of an Indian company making a successful buy of a sporting franchise after Vijay Mallya’s buy of the Spyker F1  racing team now renamed ‘Force India’.

Irrespective of whether these deals go through or not, the facts established in the process that global franchisees face the reality of an Indian company owning them cannot be escaped. Something of a dream even a decade ago.