Temat: Indians in Europe

Indian firms may shell out $10bn on Europe buys

Hyderabad , Oct. 23: Indian companies are expected to spend more than $10 billion on acquisitions in Europe this year, accounting for almost 90 per cent of the total overseas purchases, according to IndusView Advisors, an advisory firm. The acquisition of the Anglo-Dutch Corus Group Plc by Tata Steel Ltd for $8 billion adds to the $2.68 billion spent by Indian firms during the first half of 2006 on 32 acquisitions of European firms. It, however, does not include the $38 billion purchase of Arcelor SA by Mittal Steel, as the latter is not India-based.

“The Tata-Corus deal is a shot in the arm in the globalisation of Indian firms,” says Bundeep Singh Rangar , chairman of IndusView . “ Europe ’s multilingual, multicultural and fragmented marketplace means that Indian companies must buy their way into the European market.”

“The single market and common language make the US market accessible to Indian companies. Familiarity with Asian culture makes nearby Asian markets much more conducive for business,” he said. “ Europe ’s diversity makes it a tougher market to crack by organic growth alone,” Mr Rangar said.

Mergers and acquisitions worth $10.8 billion involved Indian companies during the first six months of 2006. These included $4 billion spent by Indian companies on 85 overseas acquisitions. Two-thirds of money was spent on buying European firms. On the flip side, foreign companies bought 34 Indian firms worth $3.4 billion.

According to IndusView , the United Kingdom remained the top destination for acquisitions by Indian companies. India also became the third largest investor in the United Kingdom as Indian companies invested about $2 billion in the UK financial year to March 2006, more than twice the previous year. Tata Group with revenue of $22 billion and equivalent to about 2.8 per cent of the India ’s GDP, leads the M&A league table with its acquisition of Corus Group Plc