Anil Ambani-led Reliance Infra buys Pipavav Defence for Rs 819 crore

In the biggest acquisition in the defence sector in the country, billionaire Anil Ambani-led Reliance Infrastructure on Wednesday announced acquisition of Pipavav Defence and Offshore Engineering for Rs 819 crore.

Reliance Infra will buy 18 per cent stake in the company at Rs 63 per share and make an open offer for additional 26 per cent at Rs 66 per share.

The company will buy an additional 7.1 per cent from promoters if the open offer fails. Post transaction, existing promoters of Pipavav Defence will continue to retain a minority stake in the company, together with two non-executive board seats.

After completion of the acquisition, Ambani will become Chairman of the company, which will be renamed as Reliance Defence Limited.

Commenting on the transaction, Ambani said: This is a unique opportunity for Reliance Group to participate in Prime Minister Narendra Modi's 'Make in India' programme for the high growth defence sector.

Nikhil Gandhi, the founder promoter and Chairman of Pipavav Defence, said, "This transaction is an endorsement of the vision we set out to achieve almost 10 years ago. Aside from the commonality of vision, we share a philosophy of long-term value creation for all stakeholders."

Last year, the government had increased FDI cap in the defence projects to 49 per cent to boost investment inflows in defence manufacturing.