India Inc India Inc: Wednesday, 16 May 2012 11:46

Indian cross-border M&As robust: Report

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grant-thorntonCorporate players in India are increasingly getting more attracted to cross-border acquisitions than they were a few years ago, according to a latest survey. Grant Thornton found that 37 per cent of business leaders are planning M&As over the next three years.

According to the global accounting and consulting firm, corporates worldwide who have successfully plotted their way through the global downturn are now seeking to invest the cash resources built up over a period of time on mergers and acquisitions activity.

Its survey noted that of those companies seeking to expand through acquisition in the next three years, 33 per cent expect to do so through a cross-border transaction, a rise from 28 per cent in 2010.

The survey further reveals that the proportion of businesses seeking to grow through M&A, be it overseas or within their own market, has risen steeply over the past two years from 26 per cent in 2010 to 34 per cent in 2012.

“It is encouraging that enterprising corporates in mature markets appreciate that M&A remains a vital strategic tool to enable them to benefit from these trends,” Grant Thornton India Partner Munesh Khanna said.

In the specific case of India, 29 per cent of business leaders showed real enthusiasm to expand overseas.

“Acquisitive growth is very much on the agenda for Indian business leaders as they continue to focus on driving value,” Khanna added.

A region-wise analysis shows that North America, where 37 per cent business leaders plan to make an acquisition in the next three years, is followed by UK & Ireland (36 per cent) and the BRIC economies (35 per cent). In mainland Europe, which is struggling with the euro crisis, just 28 per cent of business leaders indicated an interest in M&A activity in the coming three years.

This global uncertainty might impact M&A activities involving Indian companies as well.

Another recent survey of senior executives representing large organisations conducted by global consultancy Ernst & Young along with research group Economist Intelligence Unit had found that a general slowdown over the next 12 months is likely in the country.

In terms of M&A destinations for Indian entities, the US and the UK top the chart. Other preferred nations are South Africa, China and the Philippines.

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