India Inc’s Acquisitions

The Economist writes:

So far this year Indian firms have announced 34 foreign takeovers worth more than $10.7 billion in all, according to Dealogic, a market-research outfit. Last year’s total was $23 billion, more than five times the previous record and more than the investments made by foreigners in Indian companies. For local industrialists, among the proudest Indians, the buying binge indicates a renaissance, and not only in business. There’s a new India emerging, says Kumar Mangalam Birla, chairman of the Aditya Birla Group, a big conglomerate. This shows the new-found respect that India commands in the global arena.

the tide of foreign acquisitions by Indian companies will continue to rise, with more and bigger deals. How successful they will be is less certain. No big foreign acquisition has failed so fareven though, according to consultants at McKinsey, that is the fate of 60-70% of cross-border takeovers. It’s important for companies to look at the economic rationale, and not get taken to extremes by emotion and ego, says Ranbaxy’s Mr Singh.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.