Business Merger and Acquisition, Flipkart, eBay - Current Affairs Questions and Answers

ANSWER: Rackspace

Explanation:
Cloud services provider Rackspace Hosting Inc said it would be acquired by Apollo Global Management LLC in a deal valued at USD 4.3 billion. The PE firm will boost investments in the technology sector.

• Rackspace’s shares went up 4.3 percent at USD 31.50 in early trading on 25th August.
• Offer represents a premium of 38.2 percent to Backspace’s closing price on August 3, the day prior to reports that the company was in advanced talks with PE firms for a go private deal.
• Rackspace had been reported to earlier be in talks with Apollo
• As part of the deal closing in the 4th quarter, PE firm Searchlight Capital Partners will also make an investment in Backspace
• Apollo with USD 186 billion in assets have been stepping up investments in technology
• Affiliates of the firm in July agreed to acquire Outerwall Inc, the owner of Redox video rental kiosks private in a deal valued at USD 1.6 billion
• Rackspace leases server space and helps corporations store and access data in cloud.
• It has focused on growing its cloud business in the face of rising competition from established players such as IBM Corp, Microsoft and startups in the field
• Citigroup, Deutsche Bank, RBC Capital Markets LLC and Barclays were financial advisors while Goldman Sachs and Co advised Backspace.
• Financing for the deal is being provided by CItigroup, Deutsch Bank, Barclays, Royal Bank of Canada are providing financing for the deal
• Paul, Weiss Rifkind and Wharton & Garrison LLP are legal advisers to Apollo while Wilson Sonsini Goodrich & Rosati is Rackspace’s Legal Adviser.

ANSWER: Billion Capture+

Explanation:
A lot of market intelligence that was acquired over a period of time by India's leading e-commerce company Flipkart is being put to test as the company's own smart phone product is going on sale under Billion Capture + brand in INR 10,000 price bracket from November 15, 2017.

Hyderabad-based homegrown technology OEM Smartron has worked on Flipkart's maiden smart phone product in terms of design and development besides getting it manufactured for the e-commerce company.

The partnership with Flipkart comes as a big breakthrough for Smartron as it has been looking for opportunities.

ANSWER: Thomas Cook India Group

Explanation:
Thomas Cook India Group, the holding company of Fairfax in India, has acquired five destination management companies of Kuoni Group for ₹125 crore.

The acquisition will deliver greater synergies and growth opportunities across inbound, outbound, MICE and corporate travel businesses.

In April, the company had entered into an agreement with Kuoni to acquire these businesses located in Asia, Australia, Middle East, Africa and Americas and the deal closed on June 29, 2017.

The acquisition will enable Thomas Cook India Group to expand its global footprint to 21 countries in 4 continents.

These companies include Asian Trails in Asia Pacific, Allied T Pro in North America, Desert Adventures in Middle East, ATM in Australia and Private Safaris across Southern and Eastern Africa.

With the addition of 17 new countries through the acquisition, Thomas Cook India Group’s travel business network had expanded significantly adding 1,000 crore to the company’s top line and ₹25 crore to profit before tax (PBT).

Prior to this acquisition, the Group’s Thomas Cook (India), SOTC Travel, TCI-SITA and Kuoni Hong Kong had a network spanning 4 countries which include India, Sri Lanka, Mauritius and Hong Kong.

Post acquisition, The Thomas Cook India Group’s employee strength has gone up to 6,500 people in 21 countries. It has a combined revenue of ₹8,700 crore.

The acquisition of a significant part of Kuoni’s Global Destination Management network represents an important milestone for a rapidly growing Thomas Cook India Group.

ANSWER: Ramkumar Narayanan

Explanation:
Ramkumar Narayanan, general manager and global head of monetisation products at eBay Marketplaces in India, has resigned from the firm.

He was primarily responsible for generating revenues for eBay.

Previously, he was the vice president of global product management at Yahoo and also worked with Microsoft in the past.

eBay has mainly two divisions in the country - a marketplace, which is based in Mumbai, and the development centre in Bengaluru.

The development centre is divided into two teams—core product and development, and analytics.

eBay Inc. entered India after acquiring an existing online site Bazee.com in 2004, much before Flipkart or Amazon started business in the country.

However, due to heavy investments from other competitors, the company could not thrive on its early-mover advantage in the country.

The Indian arm of US-based online selling platform reported a three-fold rise in revenue and a wider loss for the financial year 2015-16.

According to filings with the Registrar of Companies, eBay reported losses of INR 262 crore for the year ended March 2016 versus INR 172 crore in the same year-ago period. Revenues soared to INR 392 crore in 2015-16 from INR 132 crore in the previous financial year.

In November 2016, eBay dismissed nearly 30% of the product and technology team at its development centre in Bengaluru.

The work done by these teams was transferred to other global locations, the company had said.

The company has been trimming its global workforce since 2015 when it had laid off 350 people from its marketplace and payments entity PayPal, which it acquired in 2002.

ANSWER: Kalyan Krishnamurthy

Explanation:
Former Tiger Global executive Kalyan Krishnamurthy has been named the new CEO of Flipkart following managerial restructuring.

Binny Bansal has been moved to the newly created position of Group CEO. Krishnamurthy joined Flipkart in June 2016 as head of commerce unit.

Tiger Global is the largest shareholder and investor in the Bengaluru based company. Binny Bansal took over as CEO previously from co-founder Sachin Bansal who was named executive chairman for the group.

The newly formed organisation will focus on creating future value through a portfolio of new, high growth businesses, managing capital allocation across group companies.

Krishnamurthy will report to Binny Nansal along with Myntra Jabong CEO Ananth Narayanan, while Nithin Seth will be COO for Flipkart. Current Ekart CEO Saikiran Krishnamurthy will move to a new role.

Know More About Flipkart

• Type of site: E-commerce
• Founded: 2007
• Headquarters: Bangalore, Karnataka, India
• Area served: India
• Founder: Sachin Bansal, Binny Bansal
• Key people: Sachin Bansal (Chairman), Kalyan Krishnamurthy (CEO)
• Industry: Internet
• Services: Online shopping
• Employees: 35,000 (2015)
• Subsidiaries: Myntra, Jabong.com, PhonePe
• Website: www.flipkart.com

ANSWER: The Eye Tribe

Explanation:
Facebook’s virtual reality-focused Oculus division has acquired eye-tracking technology startup The Eye Tribe based in Denmark for an undisclosed amount.

The Eye Tribe startup was founded in 2011 by four students from the IT University of Copenhagen. It develops software that enables eye control on mobile devices and computers, allowing hands-free navigation.

The acquisition will benefit Facebook’s Oculus to integrate eye-tracking software to its Rift VR (virtual reality) headset, allowing users to control actions by moving their eyes.

Oculus, a virtual reality company, was acquired by Facebook in 2014 for 2 billion dollars. It had rolled out two new features - Parties and Rooms - for Samsung Gear VR.

Oculus

CEO: Brendan Iribe

Founded: 2012, Irvine, California, United States

Headquarters: Menlo Park

Acquisition date: March 25, 2014

Founders: Jack McCauley, Brendan Iribe, Palmer Luckey

Head organization: Facebook, Inc.

ANSWER: Essar

Explanation:
Russia’s Rosneft Oil Company along with its partners on 15th Oct 2016 acquired India’s second biggest private oil firm Essar Oil in an all cash deal valued at USD 13 billion

• Rosneft’s partners include Rosneft Oil Company, United Capital Partners and Trafigura
• The acquisition was announced during the 8th BRICS Summit in Goa
• Rosneft will have a 49 percent stake in the refinery, port and petrol pumps of Essar Oil
• The remaining partners will split the 49 percent equity equally
• Remaining 2 percent will be held by minority shareholders after the delisting of Essar Oil
• Deal includes USD 10.9 billion for Essar’s Vadinar refinery and USD 2 billion for the port terminal that feeds the refinery
• It also includes Essar Oil’s debt of USD 4.5 billion and USD 2 billion debt with the port company and power plant
• Rosneft now becomes the third international player after after Royal Dutch and Shell and British Petroleum to enter the Indian fuel retailing market
• Essar Oil a subsidiary of Essar Group is a fully integrated oil & gas company and is among the largest single site refineries in Vainer, Gujarat with the capacity of 20 MT
• Essar Oil has a portfolio of offshore and onshore oil and gas blocks with around 1.7 billion barrels of oil equivalent in reserves and resources
• The company was established in 1969
• Essar Group is led by Shashi Ruia and Ravi Ruia

ANSWER: Reliance

Explanation:
Reliance Communications (RCom) and Reliance Jio (RJio) are working together through a “virtual merger” of their infrastructure such as spectrum and towers and the two companies are reaping the synergies, according to RCom president Anil Ambani.

• “What we have accomplished is a virtual merger between Rcom and RJio. Our spectrum is shared, our network is shared, our towers are shared, our fibre shared, our voice is shared and every effort to reap synergies, every effort to lower our costs, to be capital light has been achieved,”- he said in an official statement.
• RCom has a full 4G LTE long term evolution network on a pan Indian basis without capital expenditure on the balance sheet
• Assets shared and traded with Rjio have ensured RCom does not shell out entire capital expenditure
• RCom is also unlikely to bid at the upcoming spectrum auction given that RJio has deposited Rs.6,500 crore as earnest money deposit,
• The proposed merger with Aircel will create wealth for shareholders
• RCom expects a deal soon for its tower business, he said.

ANSWER: All of the above

Explanation:
Flipkart has entered into exclusive licensing agreement with brands like Provogue, Swiss Military, Carlton London and Chemistry.
Flipkart owns Myntra and Jabong. It is seeking to displace Amazon as the number 1 retailer in India in the field of e-commerce.

• Partnerships will ensure broader range of products under Flipkart Assured, a newly launched programme that promises better quality and consumer experience
• The Bengaluru based company recently made news for acquiring fashion portal Jabong for USD 70 million.
• Fashion currently registers USD 1.5 billion in GMV or gross merchandise value for the e-tailers
• Flipkart aims to cross USD 5 billion GMV mark by the close of the year

ANSWER: TEN Sports

Explanation:
Sony Pictures Networks India has entered into an agreement to acquire TEN Sports Network from Zee Entertainment Enterprises Ltd and subsidiaries for USD 385 million subject to regulatory approval.

• Acquisition will add South Asia’s leading sports network to SPN’s portfolio of channels
• TEN Sports holds cricket rights in South Africa, Pakistan, Sri Lanka, West Indies and Zimbabwe
• Holding rights for major wrestling, football, tennis, gold, athletics and motor and cycling including Tour De France, it will diversify SPN’s interests
• Sony Entertainment Television and SAB TV are the main brands of SPNI although it owns many other brands and companies under the umbrella Sony brand.
• On 3 November 2015, MSM was renamed Sony Pictures Networks India Private Limited after 21 years.