Adani Weighs Equity-Debt Mix to Fund $2.9 Billion Evos Takeover
Adani Group plans to fund up to half of its €2.56 billion ($2.9 billion) takeover of Dutch liquid storage operator Evos with equity, and the rest with a syndicated loan, people familiar with the matter said. MUFG has committed up to €2.8 billion.
Adani Group eyes a mix of equity and debt to pay for its €2.56 billion ($2.9 billion) takeover of Netherlands-based Evos B.V., with equity covering up to half the price, according to people familiar with the matter.
The group, controlled by India's richest person, Gautam Adani, would put in up to the equivalent of $1.45 billion. A syndicated loan, a debt package shared among several banks, would cover the rest. The people asked not to be identified because the talks are private.
Banks line up
Mitsubishi UFJ Financial Group Inc. is the sole underwriter. It is providing financing commitments of up to €2.8 billion, according to a November 5 statement from Adani Group announcing the acquisition.
Other lenders are in talks to join later, once a formal invitation goes out. They include DBS Group Holdings Ltd., First Abu Dhabi Bank PJSC, Barclays Plc and State Bank of India, the people said.
The debt would start as a bridge loan, a short-term facility, with a tenor of about 18 months. It could later be refinanced with longer-term debt. Adani is also working to refinance about €1.3 billion of existing Evos debt.
Discussions continue, and the size, structure and other terms could still change, the people added. A First Abu Dhabi Bank spokesperson declined to comment. Representatives of Adani Group, MUFG, Barclays, DBS and SBI did not immediately respond to requests for comment.
A template from recent deals
The financing is expected to broadly follow the structure of two recent large Indian overseas acquisitions, two of the people said. Tata Motors Ltd. syndicated a €3.875 billion bridge loan last year to buy Iveco Group's commercial vehicle business. Sun Pharmaceutical Industries Ltd.'s $12 billion purchase of Organon & Co. combined debt and a cash infusion.
Rules have also loosened. Since July 1, domestic Indian banks may fund up to 75% of the value of corporate takeovers. SBI formed a partnership with MUFG in March to explore deals and later helped finance the Sun Pharma purchase.
"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.
Expansion plans
Evos is Europe's second-largest independent liquid storage company. The purchase extends Adani's reach into European markets as the group plans to invest $100 billion over the next few years.
Morgan Stanley expects earnings before interest, taxes, depreciation and amortization at flagship Adani Enterprises Ltd. to rise to 299 billion rupees ($3.2 billion) by the fiscal year ending March 2029. That compares with 140 billion rupees in fiscal 2026, a compound annual growth rate of 29%.
S&P Global Ratings said Adani Ports and Special Economic Zone Ltd. can maintain its financials and credit quality after the Evos acquisition. It said the deal fits the company's growth strategy and moves it into developed markets with stable operating environments.
