M&A by Indian Multinationals at Foreign Turf valued at US$11.37 billion

India Inc acquired companies abroad valued at $11.37 billion while the foreign firms invested much less $2.06 in buying out the Indian firms in the first quarter of fiscal 07-08, according to ASSOCHAM Eco Pulse Study (AEP).

Even on the domestic turf, the Indian firms stayed ahead of foreign companies in acquiring entities based and operating in India. As against the M&A worth $2.06 billion by the foreign firms in India, the Indian domestic acquisitions were worth $2.63 billion as per the AEP Study on “Mergers and Acquisitions in First Quarter 2007-08”.

Tata Group carried out massive buy-outs to the tune of $5.35 billion at domestic and international level during first three months of current financial year. Of this amount $4.53 billion were spent on global acquisitions, while $60 million were reserved for domestic consolidation activity. Tata Power Company took over Indonesia based PT Kaltim Prima Coal and PT Arutim Indonesia for $ 1.1 billion. Indian Hotels Company Ltd acquired Hotel Campton Palace for $60 million in United States.

Tata Steel entered into a joint venture with Vietnam Steel having 65 per cent stake with the money worth of $2.1 billion. Another buy-outs worth $2.157 billion are in pipeline by Tata Steel and Tata Tea.

Essar Global has made second largest acquisitions amounting to $1.665 billion in steel sector during the period tracked by AEP. It announced take over of Algoma Steel based in Canada for $ 1580 million and Minnesota Steel in United States for $85 million.

United Breweries Group has undertaken the mergers and acquisitions worth $1.3 billion within the time frame of three months in the aviation (domestic) and liquor (abroad) industry. The Kingfisher Airlines owned by the Group acquired 26 per cent stake in Air Deccan for $ 134 million. At the international front, it took over Whyte & Mackay based in United Kingdom for $1.16 billion.

Region Wise Analysis

United States of America was the most favored destination of the Indian global hunters. Total deals amounting to $3 billion were accomplished by the Indian corporates in their quest for market expansion, integration with subsidiaries and consolidation of market position. Acquisition worth of $1.58 billion were made in Canada, making the North American region at $ 4.58 billion priced deals - the most sought after by Indian businesses.

Asia pacific was the second most preferred territory after North America as the acquisitions valuing at $3.8 billion took place in the first quarter. Vietnam, Indonesia, Israel and Singapore were favored places as the deals worth $2.1 billion, $1.1 billion, $0.45 billion and $0.15 billion were undertaken by expansion oriented Indian companies in these countries.

Acquisition deals in Europe were valued at $2.89 billion, third largest after North America and Asia Pacific. Within the European region, maximum M&A activity worth $1.52 billion was undertaken by the India-based companies in Germany. United Kingdom was second to Germany as $1.2 billion were spent on taking over the business entities operating in the country. Italy and Poland were other countries where the companies were being targeted by the ambitious business leaders of India.



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