Merger and Acquisition
Mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporatefinance and management dealing with the buying, selling and combining of different companies thatcan aid, finance, or help a growing company in a given industry grow rapidly without having to createanother business entity.
M&A Activities in India:
In 2007, there were a total of 676 M&A deals and 405 private equity deals,
in 2007, the total value of M&A and PE deals was USD 70 billion,
Total M&A deal value was close to USD 51 billion,
Privateequity deals value increased to USD 19 billionGrowth Drivers:
Globalisation and increased competition
Concentration of companies to achieve economies of scale
Cash Reserves with corporateTrends:
Cross-border deals are growing faster than domestic deals
Private Equity (PE) houses have funded projects as well as made a few acquisitions in India
Major M&A Deals Undertaken Abroad by India Inc.
Tata steel buys Corus Plc : 12.1$ billion
Hindalco acquired novelis: 6$ billion
Tata buy jaguar and land rover : 2.3$ billion
Essar steel buys Algoma Steel: 1.58$ billion
Vodafone buys hutch : 11$ billion
POSCO to invest in building steel manufacturing plants and facilities in India by 2016
Goldman Sachs Plans investment in private equity, real estate, and private wealth managementIn year 2008..
M&A deals in India in 2008 totaled worth USD 19.8 bn
Less compared to last year which stood at 33.1 bn $.
Decline of M&A activity was in line with the global activity.
Cross border M&A totaled 8.2 bn $ compared to 18.7 bn $.