CII expects M&A volumes at $50

09 April 2007

New Delhi: The value of mergers and acquisition in India is expected to reach $50 billion in 2007, says CII in a new report. The acquisition of the Anglo-Dutch company Corus by Tata Steel for nearly $12 billion and Canada's Novelis by Hindalco, has set what is expected to become the trend for mega deals by Indian companies.

According to Sarita Nagpal, manufacturing services division head, CII, the M&A scenario in India had witnessed radical changes with 2007 expected to account for deals worth $50 billion, compared to just $16.3 billion two years ago.

She said, the total value of M&A deals India has been growing at a compounded annual growth rate of 28 per cent since 2002 and crossed $20 billion in 2006. Out of the 480 M&A deals in 2006 amounting to $20.3 billion, Indian companies reported 266 cross-border deals worth $15.3 billion.

Buoyed by a liberal and conducive environment that enables them to raise the large investments required, Indian companies today are much more aggressive than earlier, to the extent that for the first time ever, Indian overseas investment will surpass foreign investment in India.

"Indian companies are spreading their wings beyond borders and acquiring foreign assets to serve global markets," said Nagpal. She noted that the total value of M&A deals in India has been growing at a compounded annual growth rate of around 28 per cent between 2002 and 2006.