India leads BRIC’s acquisition spree

India leads BRIC’s acquisition spree

New Delhi: Emerging markets are likely to overtake developed countries in terms of international acquisitions in the next two to three years, while India has emerged as the most acquisitive among the emerging nations, a latest study says.

Deal flow between emerging and developed economies is beginning to converge as companies from the BRIC nations (Brazil, Russia, India and China) start to ramp up their mergers and acquisitions activity, according to global consultancy KPMG’s Emerging Markets International Acquisitions Tracker.

“Four years ago, the emerging-into-developed deals were outnumbered by four to one. By the end of 2006, that ratio was down to just under three to one, and already in the first half of 2007, that gap has narrowed even further, with the ratio now being less than two to one," Ian Gomes, Chairman of KPMGs New and Emerging Markets practice in the UK.

This begs the question as to when one will overtake the other certainly looking at current trends, its feasible that this crossover could happen within the next two to three years, Gomes said.

In India, a total of 32 outbound deals were recorded in the first half of 2007, “an impressive figure which puts the country well on target to beat the 50 deals which took place during the whole of 2006," the KPMG report said.

However, China still has some long way to go to catch up with India - which was easily the most acquisitive of the emerging nations, the report said.

“The large volume of outbound deals is indicative of the current mindset of many Indian companies; grow, acquire and utilise debt facilities to the full," Gomes said.