New Delhi: Merger and Acquisition (M&A) volumes in India are expected to touch $50 billion (Rs2,13,250 crore) in the current year, making the country an important player in the global M&A market.
“The total value of M&A deals in India has been growing at a compounded annual growth rate of 28% since 2002 and crossed $20 billion in 2006,” CII Manufacturing Services Division Head Sarita Nagpal said.
Out of the 480 M&A deals in 2006 amounting to $20.3 billion, Indian companies clocked 266 cross-border deals worth $15.3 billion, she said.
North America accounted for the largest proportion of outbound acquisitions (32% of total deals) followed by Europe (29%).
The trend is likely to continue in the current year, Nagpal said, adding Indian companies are likely to take ever larger steps globally, particularly in the U.S. and Europe.
Outbound deals from India had a sectoral trend with pharma companies being particularly aggressive in scouting for opportunities with more than $2.2 billion worth of deals in 2006 followed by the IT sector.
Tata Steel’s acquisition of the Anglo Dutch steel company Corus at a price of $12.10 followed by Hindalco’s acquisition of Novellis for $6 billion had set the trend for the years.
The spurt in the cross-border M&A activity is backed by healthy performance at home, strong management capabilities and access to competitive financing, CII said.