Most executives feel that the acquisition trends reflect India Inc.’s global leadership
aspirations, and that MnA is an integral part of companies’ globalization strategies.
Meeting international regulatory compliance requirements is expected to be the most
important challenge ahead of the acquirers.
EVS Contact
PRCC Tel: +91 124 4154000
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Evalueserve - Greenfield Online Business Sentiments Survey on Indian M&A Trends
Gurgaon, India, May 24, 2007: Evalueserve and Greenfield Online conducted
a survey with 100 top Indian executives to understand their opinions on the recent
mergers and acquisitions by Indian organizations. Aimed at senior finance and strategy
executives, and MnA analysts, the survey results throw up some interesting insights.
Most executives feel that the acquisition trends reflect India Inc.’s global leadership
aspirations, and that MnA is an integral part of companies’ globalization strategies.
Access to best-in-class technologies and the business imperative to achieve critical
scale were also felt to be key drivers of these acquisitions. While 56% of survey
respondents felt that these deals were overvalued, most of them went on to highlight
that given the strategic aspirations of the acquirers, they did the right thing
by moving aggressively on these buy-outs. In short, companies have little choice
but to pay more than the ’true value’ in a highly competitive bid atmosphere, hoping
that they would be able to over-achieve on value realization.
Meeting international regulatory compliance requirements is expected to be the most
important challenge ahead of the acquirers. While integration is also viewed as
a key challenge, an overwhelming 83% of survey respondents express confidence in
companies’ ability to manage such issues. ’New-economy’ industries such as IT/ITeS,
telecom, pharmaceuticals and biotechnology are expected to be the nurturing ground
for future MnA activity. Most interestingly, such MnA activities are seen to be
indicators of the Indian growth story, and serve to boost market sentiments. With
the economy set to grow at close to double digits this year, these deals are viewed
to be evidences of Indian corporate houses’ coming of age. While less than 40% of
respondents doubt the ability of Indian business houses to create adequate value
from these acquisitions, a resounding 90% of them feel that such trends are symptomatic
of their aggressive global aspirations. Over 60% of respondents felt that such deals
demonstrated a high growth phase in the Indian economy. Meeting international regulatory
compliance requirements is expected to be the most important challenge ahead of
the acquirers.
When Anglo-Dutch steelmaker Corus accepted the $ 13 billion takeover bid from India
based Tata Steel, questions were raised around the prices and rationale. Many analysts
and industry experts felt the buy-out price to be highly unreasonable and inflated.
But, the largest Indian deal ever, got the 56th biggest steel producer Tata Steel
to leap-frog from the 56th to the 5th position in the global steel sweepstakes.
Steel giant Mittal Steel’s buy-out of Arcelor for $ 32.2 billion redefined the industry
further. India-born steel tycoon L. N. Mittal portrayed the ambitions of new age
companies aspiring to achieve global leadership. It’s not just steel. This trend
is evident in FMCG, consumer electronics, pharmaceuticals, paper, oil & gas, chemicals,
IT & ITeS, automotive, and hospitality sectors to name a few. Would this over-exuberance
lead to stormy days for these companies or are these initial indications of consolidation
and signs of emerging giants?
About Evalueserve
E offers high-quality knowledge services in Investment Research, Business Research,
Intellectual Property, Market Research, and Data and Financial Analytics to clients
worldwide. Founded in 2000, it has more than 1,500 employees, with operations centres
in India, China and Chile, and a strong sales presence across all major global locations.
Evalueserve won several awards in 2006, including Red Herring Asia Top 100, NASSCOM
IT Innovation Award for Business Model Innovation and the Deloitte Fast 500 APAC
Award. To learn more about Evalueserve, please visit
http://www.Evalueserve.com
About Greenfield Online
Greenfield Online, headquartered in Wilton, CT, is a leading independent provider
of Internet survey solutions to the global marketing research industry and industry.
Through its subsidiary in Europe, Ciao GmbH, the company operates its European Internet
survey solutions business as well as one of Europe’s leading comparison shopping
portals, Ciao.com. The company has built and actively manages one of the industry’s
broadest reaching respondent communities comprised of Internet and wireless panels
and a proprietary Real-Time Sampling™ communications channel. Our Ciao.com shopping
portal allows consumers to write and access detailed reviews about millions of products
and compare prices when they are ready to buy. For more information visit
http://www.Greenfield.com or http://www.ciao-group.com
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