Indian companies looking to acquire more U.S firms
By siliconindia   |   Thursday, 25 June 2009, 01:40 IST   |    3 Comments
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Indian companies looking to acquire more U.S firms
Bangalore: Many Indian multinationals are looking to acquire U.S. companies. Federation of Indian Chamber of Commerce and Industry (FICCI) report says, "In the past two years, Indian companies have taken over as many as 143 American companies in various sectors ranging from a small 0.7 to a whopping $1,005 million." There is a general belief in the U.S that outsourcing has helped India, but studies have shown that it is actually the U.S. companies who have gained the most out of the outsourcing. "In terms of value, more than 70 to 75 percent of the benefit goes to U.S. companies." There is serious issue of taxation and outsourcing. On the one hand government is signing the civilian nuclear agreement; on the other hand there is a serious issue of dual use technology relaxation. FICCI will convincingly present the case of Indian business that these kinds of measures, including the taxation measures for outsourcing and ending the Generalized System of Preferences (GSP) for India are not right. The report said the size of the deals was between the range of 0.8 million to $1,005 million. In the fiscal year 2008-09, Indian companies were involved in acquisition of 49 companies. Of these, deal values were disclosed in 24 cases, which amounted to $960 million. The size of the deal ranged from 0.7 million to $172 million. The report attributed the rise in Indian outbound investments to the U.S. to strong economic growth, easy availability of debt finance for companies. In the next year, it dropped by 48 percent in volume mainly due to volatility in the global market and credit crunch. Unfavorable exchange rate movements have further increased the cost of overseas acquisitions for Indian multinationals, the report said.

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