30 September, 2007

More Outbound Than Inbound -M&A

While most of India’s $23.1 billion merger and acquisition transactions in the first two months of 2007 has been outbound —
for instance, the $12.1 billion Tata-Corus deal — there has been some sizeable activity on the inbound front as well. I
nbound transactions worth over $3 billion across 55 deals were concluded or announced.

Singapore Exchange and Deutsche Boerse picked up 5 per cent each in Bombay Stock Exchange for a combined investment of $85.41 million.

Earlier, New York Stock Exchange and a clutch of private equity investors picked up 26 per cent the National Stock Exchange for $460 million.

The only deal of note in the IT sector, which dominated the inbound M&A market last year, has been Electroni Data Systems’ $40 million acquisition of Bangalore-based RelQ Software.

However, industry experts say there are still plenty of good assets worth picking up in the mid-market IT services segment.

Rumours doing the rounds indicate that Chennai-based Polaris Software may be the next big sell-out.

What is also interesting about the inbound deal market this year is the diversity of buyers. Just as Indian companies have widened their horizons, investors from markets as diverse as Switzerland, Mexico, Sweden and Singapore have begun to acquire assets in India. US and western European companies, however, retain the lead.

Investment bankers in Mumbai say that inbound deals could touch $50 billion by 2007 end.