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Indian billionaire Gautam Adani’s group is set to fund as much as half of the €2.56 billion ($2.9 billion) acquisition of Netherlands-based liquid storage operator Evos B.V. with equity, with the remainder through a syndicated loan, according to people familiar with the matter.
Adani Group will infuse equity up to the equivalent of $1.45 billion to fund the transaction, said the people, who asked not to be identified because the discussions are private. The conglomerate, controlled by India’s richest person, is also working to refinance about €1.3 billion of existing debt at Evos, the people said.
The planned debt financing would create an opportunity for global lenders as the ports-to-power company presses with its expansion overseas by acquiring Europe’s second-largest independent liquid storage company. India’s acquisition-finance market is opening up as regulatory restrictions ease with domestic banks allowed since July 1 to fund up to 75% of the value in corporate takeovers.
The overall financing strategy is expected to broadly follow the structure used in two recent large Indian outbound acquisitions, two of the people said. Tata Motors Ltd. syndicated a €3.875 billion bridge loan to fund its takeover of Iveco Group’s commercial vehicle business last year, while Sun Pharmaceutical Industries Ltd.’s $12 billion purchase of Organon & Co. involved debt funding and cash infusion.
Mitsubishi UFJ Financial Group Inc. is the sole underwriter for the Evos transaction and is providing financing commitments for up to €2.8 billion, according to a Nov. 5 statement from Adani Group announcing the acquisition.
But other lenders including DBS Group Holdings Ltd., First Abu Dhabi Bank PJSC, Barclays Plc and State Bank of India are in talks to join the financing at a later stage when a formal invitation goes out, the people said. The debt package will initially take the form of a bridge loan with a tenor of about 18 months, which could later be refinanced with longer-term debt, the people said. Discussions are ongoing and the size, structure and other terms could still change, they added.
A spokesperson for First Abu Dhabi Bank declined to comment, but added that the lender remains “committed to supporting our clients across the markets in which we operate and conducting our business in accordance with the highest standards of governance and regulatory compliance.”
Representatives from Adani Group, MUFG, Barclays, DBS and SBI did not immediately respond to requests for comment.
SBI, India’s largest lender, formed a partnership with MUFG in March to explore merger and acquisition opportunities in the country shortly after the central bank relaxed rules on local banks funding takeovers. SBI subsequently participated in financing Sun Pharma’s acquisition of Organon.
“India’s banking sector could soon be humming with more M&A deals as a privatization push opens the door to more foreign control, with domestic bolt-ons getting a boost from more than $120 billion of excess capital,” said Sarah Jane Mahmud, senior analyst at Bloomberg Intelligence.
The Adani Group is accelerating expansion across its businesses as part of plans to invest $100 billion over the next few years. Earnings before interest, taxes, depreciation and amortization at flagship Adani Enterprises Ltd. is expected to climb to 299 billion rupees ($3.2 billion) by fiscal year ending March 2029 from 140 billion rupees in fiscal 2026, implying compound annual growth rate of 29%, according to Morgan Stanley.
Adani Ports and Special Economic Zone Ltd. can maintain its financials and credit quality after its acquisition of Evos, as it expands the firm’s geographic footprint into developed markets with stable operating environments and is consistent with its growth strategy, S&P Global Ratings said.
