Al Alam Al Youm, p.2, (21-12-2006)
Indian companies go global by immigrating to the north
By: Ahmed Abdel Hamid
Launch of economic reform and liberalization programme, 10 years ago in India, has resulted in the emergence of huge Indian economic entities in several sectors including agriculture, trade, tea and steel. This year, several major Indian companies turned north to Europe, their base to go global.
The Indian companies were once the target of foreign companies searching for acquisition deals. Now, these companies are chasing major multinational companies for acquisition.
The current year witnessed a jump in merger and acquisition deals by Indian companies. $20 billion have been pumped by Indian companies for such deals, against $6.9 billion last year.
The number of acquisition deals by Indian companies reached 320 over the past two years. The average volume of these deals rose by about 500% up to $150 million.
Clearly, the Indian companies do not focus anymore on the emerging markets in Asia and Africa in search of acquisition deals. They are rather turning to major markets in Europe and the US.
One of the most prominent deals by Indian companies this year is Mittal Steel’s acquisition of the European Luxembourg-based Arcelor. The deal was concluded after a fierce struggle.
The Indian Videocon managed to buy the French Thomson Electronics and the South Korean Daewoo Electronics in two deals amounting to $1 billion. Tata Tea, a Tata Group company, bought the American Energy Brands for $677 million.
The Indian Aban Loyd bought the major Norwegian oil company Sinvest for $452 million. Suzlon Energy also bought the Belgian Hansen Transmission for $565 million.
Indian pharmaceutical companies concluded several acquisition deals. Dr. Reddy’s bought the German Betapharm for $570 million. Ranbaxy bought the Romanian Terapia for $324 million.
As the year is coming to a close, Tata Steel offered to buy the giant Netherland-British steel company Corus for $2.9 billion. If concluded, the deal would be the biggest outside India.
Having started locally in 2000, acquisition and merger deals in India expanded over the recent years to include almost all fields from US hotel companies to European steel and pharmaceutical companies.
Anjan Roy, economic advisor to the Federation of Indian Chamber of Commerce and Industry, said that some Indian companies have become multinational through merger and acquisition deals which helped them establish themselves in the global arena, tap new markets, and gain international recognition.
The Indian companies turned to Europe taking it as a base point to expand in the whole world. The Indian acquisition and merger deals exceeded 300 this year. Europe’s share of these deals amounted to 48%.
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