Mergers & Acquisitions in India: 2011 Outlook
After a dismal 2009, 2010 proved to be a banner year for Indian M & A transactions. According to Thomson Reuters, deal volume was up more than threefold from $21.3 billion in 2009 to $67.2 billion in 2010. In addition, although this overall number was just shy of the record set in 2007 of $69.4 billion, 2010 was the biggest year for outbound M & A deals originating in India. The acquisition spree driving Indian M & A stands in sharp contrast to the general slowdown witnessed globally in the M & A arena, which, according to Bloomberg, is down 46 percent from the high in 2007. In the US and Europe, the world’s largest markets, deal volumes are down by 51 percent and 59 percent, respectively.
As cash-rich Indian firms continue to hunt for strategic bargains abroad, industry insiders are confident that 2011 will continue to see a high volume of Indian M & A activity. According to Bloomberg’s M & A Global Outlook survey, companies in the Asia-Pacific region, including India and China, are expected to be the most active buyers in 2011 as attractive valuations drive deals globally. While activity is expected in all sectors, as Indian companies seek oil, gas, coal and other minerals to fuel India’s continued industrial growth, natural resources will undoubtedly continue to be the subject of a significant portion of deals originating in India.
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