Outbound deals to boost Indian M&A in 2010

by Dave

For India, the awareness of opportunities in South America is quite low. Many senior Indian business executives I’ve spoken to admit that they have traveled 100+ times to the US and Europe, but not once to any part of Latin America. To me, being in the food business in India and having never traveled to Latin America, is like being in the software business in the US and having never been to India.

Colombia is a big coal producer with only minor production elsewhere, while Brazil is the big daddy in iron ore, with Chile and Peru also being producers. Venezuela produces both, but political risk there needs to be taken into consideration.

Eleven investment bankers and deal advisers Mint spoke with said Indian firms are mainly searching for overseas targets to boost both growth and resources. This would trigger acquisitions primarily in oil and gas, metals and minerals, technology and telecom, mostly in Africa, Europe and North America, they said.

“A lot of Indian companies have strong balance sheets. They have the ability to strike deals,” said Sanjay Thakkar, head, transactions and restructuring, KPMG India Pvt. Ltd. “European companies have taken longer in recovering from the slump. And many European and North American groups are looking at dispensing their non-performing, non-core assets.”

Several Indian IT firms, too, are looking to buy companies in North America and Europe as they try to secure high-value government contracts coming up in those countries. Other companies are looking to South American nations such as Chile and African countries such as Zimbabwe for firms owning iron ore and coal mines.

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