Foreign acquisitions by India Inc. expected to post over three-fold jump in value in 2010
Noted Legal Consultant and founder of AZB & Partners, Zia Mody, stated that Indian 'tiger entrepreneurs' are expected to be more aggressive in 2010. Foreign acquisitions announced in the first quarter of 2010 have already topped the USD 13.3-billion mark in 15 mergers and acquisitions. The deal is 75 times higher than in Q1 2009, when 15 outbound deals with a total value of USD 228 million were recorded. "I expect the value of cross border deals in 2010 to be over 3 billion USD, a whopping 300% over the previous year. She continues: "Indians are realising that making overseas acquisitions makes good strategic sense apart from it coming cheap".
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(L-R) James Piesse, Zia Mody. Dinesh Kanabar, Nishith Desai & Henri Prijot
-- Noted Legal Consultant and founder of AZB & Partners, Zia Mody, stated that Indian 'tiger entrepreneurs' are expected to be more aggressive in 2010. Foreign acquisitions announced in the first quarter of 2010 have already topped the USD 13.3-billion mark in 15 mergers and acquisitions. The deal is 75 times higher than in Q1 2009, when 15 outbound deals with a total value of USD 228 million were recorded. "I expect the value of cross border deals in 2010 to be over 3 billion USD, a whopping 300% over the previous year. She continues: "Indians are realising that making overseas acquisitions makes good strategic sense apart from it coming cheap".
Speaking at the launch of 'A Guide to International Financial Centres: What Indian Investors Need to Know', a comprehensive reference book to help Indian entrepreneurs go global, Ms Mody stressed on the need for Indian corporates to be better equipped with the best expert advice available.
Concurring with her views, Nishith Desai, International Tax, Corporate Lawyer and Founder of Nishith Desai Association (NDA), said "The slowdown of M&As in 2009 was primarily due to some expensive buys and costly mistakes made by Indian companies. Indian corporates often shoot without aiming, don't plan for the future and ignore the problems of cultural mismatches as they tend to retain an 'Indian mindset' when outside India".
"Indian companies are slowly coming to realize that acquisitions do not need to be large - they need to be strategic. We are seeing increasing movement in the pharma and auto ancilliary sectors," stated Dinesh Kanabar, Deputy Chief Executive Officer and Chairman Tax for KPMG, India, who provided the cautionary tale where there was "... a NASDAQ listed company with two Indian groups as promoters holding the equity and after a couple of generations they decided to part ways. Little realizing that there were issues with regard to the other listed minority shareholders in the USA - they actually ended up spending more money on lawyers then on the whole value of investment simply because they breached two very important aspects of law".
'A Guide to International Financial Centres: What Indian Investors Need to Know' has been published by Longtail International and is available online at www.IFCbrief.com and www.allyouneedtoknowguides.com. It is priced at USD 40. The annual guide is a unique and indispensable resource for Indian businesses and investors with aspirations overseas. It demystifies the myriad opportunities now available to Indians and pulls together, in one book, the opportunities to make cost and tax effective investments around the world. The guide includes prominent contributions from internationally renowned Indian legal, accountancy and tax advisors such as Kiran Mazumdar Shaw, Zia Mody, Dinesh Kanabar and Nishith Desai as well as a plethora of up-to-date advice from individual IFCs.
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