News: India Inc at full blast on M&As

(FE 17/07/2006) New Delhi - More Indian companies are acquiring firms abroad than multinational companies taking over domestic companies.

In the first half of calendar year 2006, the number of overseas acquisitions by Indian firms was 85 — more than double the number of 34 deals at home, according to a survey by global corporate advisory firm Grant Thornton.

The average deal size increased from $32 million in 2005 to $47 million in the first half of this year. The aggressive approach can be attributed to companies’ aspiration to enhance global delivery.

There were several large deals like Dr Reddy’s acquisition of Betapharm ($517 million), a buyout by Subex of UK-based Azure Solutions ($140 million), Tata Coffee’s acquisition of US-based Eight O’Clock Coffee ($220 million), and Aban Loyd’s takeover of Norway’s Sinvest ASA ($445 million).

Overall, the value of M&A deals in the first half of 2006 grew to $10.8 billion compared with $16.3 billion for calender year 2005.

Large telecom deals included the Aditya Birla group’s additional buyout of 48% stake in Idea Cellular ($979 million), Hutch’s 5% increase in Hutch Essar ($450 million) and Telekom Malaysia’s acquisition of 49% in Spice Telecom ($179 million).