The changing face of M&A

The international liquidity crisis and the growing financial muscle of Indian corporations have changed the nature of mergers and acquisitions

Alfred Romann explains

Holcim purchased a controlling stake in Gujarat Ambuja Cement. Hindalco Industries, part of the Aditya Birla Group, acquired Novelis. Wockhardt bought Negma Laboratories in France. The Essar Group took over Algoma Steel in Canada. Dr Reddy’s Laboratories snapped up a division of the Dow Chemical Company. Let’s not forget Vodafone’s takeover of Hutchison-Essar and, most symbolically, Tata’s acquisition of iconic British motoring brands Jaguar and Land Rover. The list goes on. But the players have changed.

The majority of India-related M&A activity over the last year has been industry-specific. It has been driven not by investment banks or funds seeking attractive investment opportunities but by companies looking to develop larger domestic and international footprints. The shortage of credit and the economic slowdown in the US and Europe has all but taken the speculative investors out of the M&A game while making potential acquisition targets more accessible to corporate buyers.