Mergers & Acquisition in India

Topics: Mergers and acquisitions, BRIC Pages: 7 (1940 words) Published: January 11, 2011
Mergers and Acquisitions: A Vital Role to Change Face of Indian Business Management

Rahul Mohare1, Aniruddha Akarte2, Ruchi Garge3

Mr. Rahul Mohare1
MBA Department
Datta Meghe Institute of Management Studies
RTM Nagpur University

Mr. Aniruddha Akarte2
MBA Department
Datta Meghe Institute of Management Studies
RTM Nagpur University

Ms. Ruchi Garge3
BCCA Department
Datta Meghe Institute of Management Studies
RTM Nagpur University

The practice of mergers and acquisitions has attained considerable significance in the contemporary corporate scenario which is broadly used for reorganizing the business entities. Indian industries were exposed to plethora of challenges both nationally and internationally, since the introduction of Indian economic reform in 1991. The cut-throat competition in international market compelled the Indian firms to opt for mergers and acquisitions strategies, making it a vital premeditated option. Mergers and Acquisitions refers to that aspect of corporate strategy, corporate finance and management dealing with buying selling and combating of different companies that can aid, finance or help a growing company in a given industry grow rapidly without having to create another business entity. All companies which are interested in merger and acquisitions, are having a specific objective behind this process like:- 1. Combined economy can often reduced its fixed cost by removing duplicate departments or operation, lowering the cost of revenue, thus increasing profit margins. 2. Increased market shares

3. Cross selling
4. A profitable company can buy a loss maker to use the targets loss as their as their advantage by reducing their tax liability.

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 business are more common than other way round. 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.

Have a look at some of the highlights of Indian Mergers and Acquisitions scenario as it stands (Source:

Here are the top 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|
KEC International Ltd| SAE Towers Holdings| Texas| 95| Power transmission infrastructure| Ybrant Digital| Lycos Inc| Korea| 36| search-based internet properties and services company| Elecon | Benzlers-Radicon Group (BR Group) | UK| 34.34| material handling equipment| IFGL Refractories| EI Ceramics and CUSC International| US| 13| steel.| Table1: List of major mergers and acquisitions by India in overseas If you calculate top 10 deals itself account for nearly US $ 21,500 million. This is...

References: [1]
[2] International Monetary Fund Report 2010
[3] Grant Thornton, International Business Report 2010, Emerging Markets Leading the Way to recovery
[4] United Nations Conference on Trade and Development, 2009
[5] Accenture Annual report for ‘High Performance through Mergers and Acquisitions: India’s New Dynamics’
[6] Dealtracker, Providing business Owners with M&A market insight, A annual report by Grant Thornton, India
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