Blackstone acquires Embassy Industrial Parks

11. Is there any involvement of "net synergy", "premium for synergy", "control premium",
"liquidity discount" and/or "minority discount" applicable here? If so, discuss those in as much
detail as data may support.

Blackstone real estate managed funds acquired Embassy Industrial Parks from Warburg
Pincus 5250 crore.

Net Synergy-

The kind of synergy that exists here is, “operating synergy”, complementary technology
assets and skills.

This acquisition would result in “Blackstone” becoming the biggest retail asset owner and
warehousing landlord in India.

22 million sq feet of warehousing and logistics facilities and yet to be built assets across
locations of Delhi, Bengaluru, Hyderabad and Pune are under Embassy Industrial Parks,
which are leased to well-known retail and e-commerce players.

As Blackstone had already entered into the warehousing and logistics space in 2019, by
entering into a joint venture with GreenBase, a Hiranandani Group firm.

Post the acquisition, a portfolio of over 40 million sqft of developed and yet-to-be-developed
assets will be held by Blackstone with its partners Hiranandani and Allcargo.

Blackstone is bullish on the growth of e-commerce that will fuel the demand for logistics
space especially near city centre’s and hence this was a strategic move in building their
portfolio in the logistics and warehousing space. This acquisition will also will reinforce the
firm’s leading position in office, retail and logistics. 

Premium for Synergy-

Embassy Industrial Parks was to be sold at an enterprise value of 1700-1900 crores in an

earlier session with investors such as Asia-focused logistics player ESR and GLP-backed
IndoSpace but since the investors couldn’t agree on the valuation, both the deal’s did not
materialise.

Blackstone strongly believes that the ecommerce in India, is at a nascent state and would
growth further, due to factors such as urbanization, domestic consumption and growth in
retail sector which will be coupled by growth in demand for warehousing and logistics
facilities in major cities.

Since they have already entered the warehousing and logistics space in 2019, by entering into
a joint venture with GreenBase, a Hiranandani Group firm, acquiring Embassy Industrial
Parks would facilitate Blackstone operating synergies and hence they acquired Embassy
Industrial for an enterprise value (EV) of 5,250 crore thereby paying a premium for synergy.
There exists no control premium, liquidity discount or minority discount in this deal.