Evalueserve - Greenfield Online Business Sentiments Survey on Indian M&A Trends
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.
PR9.NET May 25, 2007 - Gurgaon, India: 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.
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?
# # #
 Download PDF Version:
 Evalueserve - Greenfield Online Business Sentiments Survey on Indian M&A Trends
|
PR9.NET
Business
Computers
