Financial Daily from THE HINDU group of publications
Friday, Nov 11, 2005
Financial Daily from THE HINDU group of publications Friday, Nov 11, 2005 |
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Corporate
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Mergers & Acquisitions Manufacturing cos scouting for acquisitions overseas Our Bureau
New Delhi , Nov 10 AFTER information technology, an increasing number of Indian manufacturing firms are spreading their wings across continents by acquiring companies overseas. In fact, data on mergers and acquisition deals in the past two months shows that an overwhelming number of cross border transactions pertained to the automotive, pharmaceutical and even FMCG/packaging industries. "There is a clear trend which shows that a number of Indian companies in these sectors are now increasingly going for overseas acquisitions. This is primarily because many American and European manufacturing firms are finding it difficult to competitively operate in face of competition from lower cost countries such as China and India," Mr Harish H.V., Head of Mergers and Acquisitions at Grant Thornton India said. Major cross border acquisitions involving Indian firms in the past two months include the purchase of 10 per cent stake in Bharti Televentures by Vodafone Plc, Apeejay Surrendra Group's acquisition of British tea company Premier Group, Bharat Forge's acquisition of Swedish auto components firm Imatra Kilsta AB among others. In fact, a study by Grant Thornton has found that in the last two months, there have been more than 30 cross-border deals, which account for close to half of all deals. Meanwhile the overall M&A scenario in India is heating up with more than 65 transactions in the past two months alone. The sector garnering the maximum investment in this period is telecom, primarily due to large size of the Vodafone-Bharti deal (estimated at about $1.5 billion). The other prominent sectors were chemicals and oil and gas, pharmaceuticals and the automotive sectors. Private equity funds also remained very active and the last two months has seen several large investments, including those of Newbridge Capital in Shriram Holdings, ICICI Ventures in Scandent Solutions, and GIC Real Estate Pte Ltd in RMZ Group. The private equity sector is expected to see further activity with funds like Draper planning to invest over $200 million in India over the next five years and Oak Investment Partners planning to start a $200 million specialised retail fund in India.
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