India Inc to continue acquisition spree in 2007

New Delhi: With 2007 witnessing two major acquisitions by Tata Steel in the steel industry and Hindalco in aluminium, Indian companies are expected to pursue more M&A deals, forecasts market research and cross-border mergers and acquisitions advisory firm IndusView Advisors Private Ltd.

According to IndusView, the new acquisitions will happen in the automotive, pharmaceuticals and IT sectors, with companies in Europe being the targets. "European pharmaceutical, automotive and IT services companies will be prime targets for takeovers in the next year. Indian companies in these sectors have reached critical mass and are set for lift off."

The research firm notes that global expansion this year, especially in Europe, is expected against the backdrop of growth projections for the pharma and IT industries, which are set to cross the $27.5-billion mark. The growth in the automotive sector could double to $18.7 billion by 2009.

The pharmaceutical industry is expected to grow by more than 13 per cent to $6.5 billion in 2007 and reach a market size of $9.5 billion by 2010, surpassing the growth rate of 9.5 per cent recorded in the last five years.

According to Bundeep Singh Rangar, chairman, Indusview, "The progressive trend in this sector is expected to continue, due to increased integration with global trade. India started to recognise global patents and the growing significance in terms of contract research and clinical trials."

The ability to produce high quality, low cost drugs will see India's exports surge over the coming months, he adds.