2011 to encounter record-breaking Indian M&As
Billionaire Sunil Mittal's $10.7 billion possession of mobile-phone operators in Africa resulted in an almost four-fold increase in takeovers this year as deals outshined 2007's $69 billion.
"Large Indian corporates are going through a growth phase: they think there is a lot of opportunity, they think they have access to capital," 35-year-old Mathew, managing director for M&A for India, said in an interview. The London-based bank climbed 13 places to No. 2 among Indian takeover advisers this year, its highest ranking."They are capitalizing on the positive sentiment to undertake long-term strategic transactions," he said.
Due to global constraints of striking assessments and domestic rivalry, the most avid buyers in 2011 are expected to be the companies in Asia-Pacific including India and China. The Bank of America which is ranked No. 3, opines that the overseas firms might target Indian pharmaceutical and consumer firms, and local enterprises will seek natural resources.
"Outbound deals would continue to be highly active given that international companies valuations are still relatively depressed, and Indian companies have access to debt and equity capital," Saurabh Agrawal, the 41-year-old head of India investment banking at Charlotte, North Carolina-based Bank of America, wrote in an e-mailed response to questions. "Inbound and local deals will also take place."
Once Mittal's New Delhi-Bharti Airtel in March approved of buying the African assets of Zain for $10.7 billion, only after that the cross-border deals rose to a record of $59.2 billion in India this year. Outbound M&A accounted for 74 percent of that volume. The acquirement extravaganza in India, China and Brazil has differences with a delay in global deals. Mergers worldwide are down 46 percent from 2007's record. In the U.S, the world's largest market, volumes are 51 percent lower, and levels in Europe are down by 59 percent.
Pending deals in India including the sale of a controlling stake in Patni Computer Systems and Honda Motor's holding in Hero Honda Motors Buyout firms including Carlyle Group are bidding to acquire those shares, people familiar with the matter have said. A group of state-run companies hired Citigroup last week to prepare a bid for Sydney-based Riversdale Mining, countering a $3.9 billion offer from London- based Rio Tinto Group.
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