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Indian companies marching ahead in M&A
By agencies
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Monday, 04 July 2005, 19:30 IST
NEW DELHI: In the first quarter of ‘05-06, Indian firms have outwitted the foreigners in mergers and acquisitions (M&A) game.
During April-June this year, Indian firms bought-out as many as 26 firms in overseas acquisitions, whereas foreign corporates could lay their hands only on 20 Indian firms. In whole of ‘04, Indian companies had closed 38 M&A deals.
Assocham study reveals that, there were a total of 110 M&As across sectors like FMCG, pharmaceuticals, metal, food and beverages, banking, financial services & insurance, media, engineering, IT & ITeS and others sectors in first quarter.
The quarter ending June saw some major deals. The Purnendu Chatterjee group acquired the Basell NV for $5.7 billion, while Deccan Chronicle acquired 67 percent stake in the Asian Age. In the pharma sector, Matrix Laboratories acquired a 22 percent stake in the Belgium-based Docpharma for $263 million in one of the largest foreign acquisition by any Indian pharma company.
Recently, the Videocon group decided to acquire the color picture tubes manufacturing business of Thompson for 220 million euros.
In other such deals Ucal Fuels acquired US based Amtec Precision Products engaged in manufacturing of auto ancillary products for $28m, Godrej Global solutions acquired outsource offshore of US, Aditya Vikram Birla group gained control over a Canada-based pulp plant.
In yet another pharma sector deal, Dishman acquired 100 percent stake in Synprotec of UK for Rs 15 crore, while Ranbaxy acquired product portfolio of a Spanish company.
In IT sector seven acquisition deals were done by Indian companies, i-flex acquired Castek software, Goldstone Technology acquired Stay Top, and Helios acquired vMoksha companies, to name a few.
In Insurance space, Max India has recently decided to acquire stake in Max Health staff International.
A sector wise break-up reveals, the major chunk of the M&As was dominated by the information technology sector (IT and ITeS), which accounted for 21 percent (17 deals) of the M&A pie. This was followed by the banking, financial services and insurance sector accounting for 15 percent (15 deals) of the total deals.
Pharmaceutical and healthcare taken together struck 14 percent of the deals in the quarter ending June ‘05. FMCG including food & beverages got 9percent share, media and entertainment (6 percent), engineering, paper, metal, telecom (3.4 percent each), infrastructure and automobile (2 percent each).
Other sector which include textiles, petrochemicals, cement and packaging and communication accounted for 17 percent share.