News: Indian firms get the overseas acquisition itch

(TT 06/04/2006) Mumbai - More and more Indian companies are prowling to buy up companies abroad.

A global study conducted by the Boston Consulting Group and the Confederation of Indian Industry focuses on 100 companies from rapidly developing economies (RDEs) that have started to aggressively buy up assets overseas.

India has the second highest number of predators on the list — 21 — after China.

The study assessed the activities and strategies of a 100 globalising companies from 10 rapidly developing economies such as Brazil, China, India and Russia with collective revenues of $715 billion, 28 per cent of which is from international business.

Most of the Chinese firms are state owned. The Indian 21 with collective revenues of $61 billion includes Tata Steel, Tata Motors, Tata Tea, ONGC, Videocon, Ranbaxy, Bharat Forge, Mahindra and Mahindra, TCS, Reliance Industries, Crompton Greaves, Wipro, Infosys, Cipla and VSNL.

The study reveals that of the 2000 plus overseas mergers and acquisitions deals by all RDE firms, Indian firms accounted for about 15 per cent of overall activity and about 26 per cent in mature markets, more than any other RDE.

Almost 60 per cent of Indian M&A activity overseas takes place in mature markets. This emphasis, shared only with South Africa, is different from that of most RDEs, which concentrate their M&A activity in developing economies.

In 2005, the number of overseas acquisition deals were 21 for Indian 21 companies, against 11 deals in 2004.