Call
it the reversal of role. India Inc. is on the prowl
for foreign turfs. After more than a decade of opening
up of the Indian economy, the hitherto vulnerable India
Inc. is finally latching on to the M&A bandwagon
to find a global footprint. So far, they have gobbled
up 50 companies abroad, shelling out a staggering $1.05
bn (Rs. 48.13 bn) during the year 2002-03. Joining the
M&A party are not just the domestic IT companies,
but a host of companies from new and old economy sectors
(from pharmaceuticals to auto to aluminum to steel).
What is driving this phenomenon?
When
in November 2003, Tata Motors announced the acquisition
of South Korea's Daewoo Commercial Vehicle Corp., the
truck-making arm of the failed Daewoo conglomerate,
for $118 mn, it was a signal that Indian takeover tycoons
had finally arrived on the global business scene. The
Daewoo acquisition not only gave Tata Motors a great
truck manufacturer at a great price, but also acted
as a gateway for the Indian auto major's entry into
China, the world's most lucrative automobile market,
and perhaps to other South-East Asian markets. During
the same month, Bharat Forge, which is Asia's largest
forging company, acquired German firm Carl Dan Peddinghaus
GmbH (CDP) for 28 mn (Rs. 153 cr)the deal helped the
Indian firm to strengthen and expand its business in
Europe.
However,
Tata Motors and Bharat Forge are not the only companies
which are on the global buying spree. A host of Indian
companies too have gone on overseas acquisitions in
recent times. And, they are the crème de la
crème of the Indian industryInfosys, Wipro,
Polaris, Cognizant, Ranbaxy, Nicholas Piramal, Wockhardt,
AV Birla Group, Reliance, Sterlite, and Bharat Forge
to name a few. These companies are making their presence
felt in the global M&A arenafrom the US to UK to
Germany to Australia. Welcome to the new breed of Indian
takeover tycoons. |
