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Indian Mergers and Acquisitions: The changing face of Indian Business

Until upto a couple of years back, the news that Indian companies having acquired American-European entities was very rare. However, this scenario has taken a sudden U turn. Nowadays, news of Indian Companies acquiring a foreign businesses are more common than other way round.

Buoyant Indian Economy, extra cash with Indian corporates, Government policies and newly found dynamism in Indian businessmen have all contributed to this new acquisition trend. Indian companies are now aggressively looking at North American and European markets to spread their wings and become the global players.

The Indian IT and ITES companies already have a strong presence in foreign markets, however, other sectors are also now growing rapidly. The increasing engagement of the Indian companies in the world markets, and particularly in the US, is not only an indication of the maturity reached by Indian Industry but also the extent of their participation in the overall globalization process.

Here are the top 10 acquisitions made by Indian companies worldwide:

Acquirer Target Company Country targeted Deal value ($ ml) Industry
Tata Steel Corus Group plc UK 12,000 Steel
Hindalco Novelis Canada 5,982 Steel
Videocon Daewoo Electronics Corp. Korea 729 Electronics
Dr. Reddy’s Labs Betapharm Germany 597 Pharmaceutical
Suzlon Energy Hansen Group Belgium

565

Energy
HPCL Kenya Petroleum Refinery Ltd. Kenya 500 Oil and Gas
Ranbaxy Labs Terapia SA Romania

324

Pharmaceutical
Tata Steel Natsteel Singapore 293 Steel
Videocon Thomson SA France 290 Electronics
VSNL Teleglobe Canada

239

Telecom

If you calculate top 10 deals itself account for nearly US $ 21,500 million. This is more than double the amount involved in US companies’ acquisition of Indian counterparts.Graphical representation of Indian outbound deals since 2000.

 | Indian Mergers and Acquisitions: The changing face of Indian Business

Have a look at some of the highlights of Indian Mergers and Acquisitions scenario as it stands (Source: http://ibef.org)

Indian outbound deals, which were valued at US$ 0.7 billion in 2000-01, increased to US$ 4.3 billion in 2005, and further crossed US$ 15 billion-mark in 2006. In fact, 2006 will be remembered in India’s corporate history as a year when Indian companies covered a lot of new ground. They went shopping across the globe and acquired a number of strategically significant companies. This comprised 60 per cent of the total mergers and acquisitions (M&A) activity in India in 2006. And almost 99 per cent of acquisitions were made with cash payments.

Mergers and Acquisitions

The total M&A deals for the year during January-May 2007 have been 287 with a value of US$ 47.37 billion. Of these, the total outbound cross border deals have been 102 with a value of US$ 28.19 billion, representing 59.5 per cent of the total M&A activity in India.

The total M&A deals for the period January-February 2007 have been 102 with a value of US$ 36.8 billion. Of these, the total outbound cross border deals have been 40 with a value of US$ 21 billion.

There were 111 M&A deals with a total value of about US$ 6.12 billion in March and April 2007. Of these, the number of outbound cross border deals was 32 with a value of US$ 3.41 billion.

There were 74 M&A deals with a total value of about US$ 4.37 billion in May 2007. Of these, the number of outbound cross border deals was 30 with a value of US$ 3.79 billion.

The sectors attracting investments by Corporate India include metals, pharmaceuticals, industrial goods, automotive components, beverages, cosmetics and energy in manufacturing; and mobile communications, software and financial services in services, with pharmaceuticals, IT and energy being the prominent ones among these.

It is merry time for Indian corporations!

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About Arun Prabhudesai

Arun Prabhudesai is founder / chief editor at trak.in. He jumped the Entrepreneurship bandwagon in early 2008 after a long 13 year stint in I.T Industry. You can follow him on twitter @trakin and Facebook. Arun’s Google+ Profile

57 comments

  1. Hi, Being an MHRM student frm MSU i must say this one thing is permanent that is CHANGE. M&A will definately take india on top after some time India definately become NONE TO NEXT.

  2. indian mergers and acquisition is very important concept and it is an activity , it is very usefull for sick industries

  3. hiiii any body can tell me d website from where i get d latest M & A of indian companies. as a MBA student i’m preparing a project on it. thanx

  4. hii… im prepairin an artile on mergers and acquisitions,being a law student this information seems interestin and useful too.. thanx

  5. BEING A GOOD BUSINESS ECONOMIST ITS REALLY A MATER OF PRIDE THAT OUR CORPORATE SECTOR IS GROWING SMOOTHLY. ACCORDING TO MY ANALYSIS THESE MERGER&ACQISITION SOMEWAY AFFECT OUR INFLATION RATE. BECAUSE BY ACQSING MORE FOREIGN COS.MORE EMPLOYMENT ARE CREATED.AND OUR ECONOMY IS HIGLY DEPAND UPON THE CORPORATE SECTOR. BY EMPLOYING MORE PEOPLE PRODUCTION INCREASE IN ORDER TO MET THE DEMAND.THEN OUR POPULATION STARTS CONSUMING MONEY.AND IN THE CURRANT FINANCIAL SENARIO,CONSUMPTION IS MORE IMPORTANT TO BEAT AGAINST THE CRISIS. FINALLY, IT IMPROVES OUR OVERALL ECONOMY. SHAH URVISH M.S.UNIVERSITY M.COM (BUSINESS ECONOMICS)

  6. Hello I am doing MBA From Global Business School Delhi. I would like 2 no abt the mergers and acquisitions in last 3 months.

  7. could you plz direct me abt the latest mergers in india and what are the reasons of mergers…..

  8. Could you please direct me to the data on M&A by Indian PLC’s for the period 2000-08. lm particularly looking for: 1. Name of the acquirer, 2.Announcement date, 3. Nationality of target, 4. Type of payment, 5.Premium paid (if information is available), 6.Friendly or Hostile.

  9. I need it for last 20 years. Where can I get the data? Thanks in advance

  10. I need data on Cross Borders mergers and acquistions in India. Please let me the source from where I can get this data. Any Govt.reports etc.

  11. as a mba student this merger and acquisition are very useful for me and i need pharmacautical mergers…

  12. Was interesed in knowin the impact of these mergers over the indian economy as a whole?

  13. hi guys…. these days india is tremendously going up…but at the same time india is not ready to accept N-deal ….my question to you all is ….why it is happening so…i suggest that india shud accept N-deal and become more powerful in this world

  14. hi, i’m doing my MBA it’s very much important to know all recent news and updates in the field of business nd this site is too usefil in providing me such info.

  15. can anyone inform me about any Medium Size company acquiring any other company in a developed country.

  16. i need information on pharmaceutical mergers.

  17. hi i am being student of BBA. india doing well in business from last few dacade i hope it will become great in acquisition of the any kind of company in whole world thnak you

  18. hey…this article was indeed very informative. Bt still India hv a long way to go..n its surely heading 2wrds it..Bt can u plz guide me regarding the attainment of objectives of any of the top 10 Merger till nw??

  19. I need info on latest mergers of companies. and problem face by company due to goverment policies

  20. i need info on failure of mergers and acqisitions due hr problems

  21. i need mergers and aquisitions

  22. raksha khetan

    hi.itz gud to see that indians are makin great deals thruout the world.i m preparing for mba this information helped me a lot.

  23. hi…being an MBA student its a very knowledgble thing….specially indis diong great in the feild of business…these mergers are not just making the CEO’s of these companies powerful instead it is helping india to become a business ace.

  24. Indian merger & acquisition are going to have a impact on the whole world.Its effectiveness can be sensed and future of Indian market is looking bright. Thank you

  25. ashutosh tripathi

    hi,this was a great and important information which we get from u and want much more information from you, rather from else so we decide that we want to join your community to get much more info. so plz provide complete information about indian indutry merger and acquistion globalization…………. thanks to you

    • hai, now i am doing ph.d programme in the topic, so i need some help with you first – i need mergers and acquisition gap

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