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Europe is Top Target for Acquisitions by India's Multinational Companies

London and New Delhi: October 20, 2006: Indian companies will spend more than $10 billion on acquisitions in Europe this year, accounting for almost 90% of the total overseas purchases, according to IndusView Advisors Private Limited.

The acquisition of the U.K.’s top steel maker Corus Group Plc by India’s 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 does not include the $38 billion purchase of Arcelor SA by Mittal Steel Co., as the latter is not India-based.

“The Tata-Corus deal is a shot in the arm in the globalization of Indian firms,” said Bundeep Singh Rangar, Chairman of IndusView, the India-focused cross-border advisory firm. “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 U.S. market accessible to Indian companies. Familiarity with Asian culture make nearby Asian markets much more conducive for business,” said Rangar. “Europe’s diversity makes it a tougher market to crack by organic growth alone.”

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.

The U.K. remained the top destination for acquisitions by Indian companies. India also became the third largest investor in the U.K. as Indian companies invested about $2 billion in the U.K. financial year to March 2006, more than twice the previous year.

India’s Tata Group with revenue of $22 billion and equivalent to about 2.8% of the country's GDP, leads the M&A league table with its acquisition of Corus Group Plc. The Tata Group had previously acquired the U.K.-based Tetley Group in February 2000, then the world’s largest manufacturer of tea, for $407 million at that time.

The Corus acquisition will be India's largest-ever global acquisition that will make Tata Steel the world's fifth largest steel producer with a capacity of about 26 million tons and combined sales of $24.4 billion.

“It gives Tata’s the size & scale to be globally competitive in a consolidating steel industry,” said Rangar.

Tata Steel had bought Singapore's Natsteel Ltd. in August 2004 for $287 million and Thailand's Millennium Steel Pcl for $400 million in December 2005.

Reliance Industries Ltd (RIL) might also join the ranks of Indian companies buying in Europe if it acquires $2.52-billion Scottish company Wood Group, as reported in India’s Economic Times newspaper. The Wood Group is engaged in deepwater engineering, offshore pipelines, enhancement of oil and gas production in mature fields etc.

Reliance Industries, India's most valuable firm with a market cap of $37.2 billion, plans to invest up to $5 billion in getting natural gas on shore from its block off India's east coast, which is now estimated to hold reserves of up to a 35.4 trillion cubic feet and 6,700 barrels of oil.

This acquisition will help RIL realise its plans to double the gas production to almost 80 million metric standard cubic metres (mmscd) per day by 2008. This would require, among other things, substantial changes in engineering and design.

Wood Group’s acquisition will make RIL self reliant in engineering design and project management for the development of new oil and gas fields, as well as maintenance and operation of existing facilities.

About IndusView:
IndusView advises multinational companies on business opportunities emanating from India’s fast growing economy. It de-risks the growth ambitions of multinational companies operating as a trusted partner that understands the complexities of the Indian market and the commercial drivers of western enterprises. IndusView provides strategic insight, competitive intelligence, research and execution capabilities to manage large vendor and corporate finance transactions.

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For more information, please contact:

Neeraj Atri
IndusView Advisors
India: +91 11 41414105
Mobile +91 9811714871

Mariya Gibb
U.K.: +44 20 7724 0777
Mobile +44 7092 883 532