Corporate India is optimistic when it comes to mergers and acquisitions (M&As). According to a Grant Thornton survey of 100 companies, 85% have a postive outlook on strategic M&As in 2011, spurred by high M&A deals this year.
So far, around nine M&A deals have been executed so far in 2010, pointing to am upward trend.
Europe will emerge as the preferred destination for such outbound deals, whereas the largest proportion of inbound acquisition will be from North America, the survey said. The telecom sector will be the largest contributor to domestic M&A deals and pharma, healthcare and biotech sector will boost cross-border deals.
"There is a considerable shift in 2010 in the outlook of Indian firms looking at M&As as one of their growth strategies," said CG Srividya, partner, corporate advisory and national leader, valuations, Grant Thornton India.
Corporate India's confidence level is backed by strong fundamentals including significant improvement in business and financial performance. The availability of finance and attractive opportunities in the global markets is also aiding sentiments.
"Indian companies are now more experienced in dealing with overseas M&A transactions and are considered serious contenders for acquiring global businesses. Acquiring global brands, gaining access to overseas markets and leveraging new technologies for Indian markets are some of the key drivers for outbound acquisitions by Indian firms," said Mahad Narayanamoni, partner, corporate finance and practice leader, healthcare and lifescience advisory, Grant Thornton India.
On private equity (PE), 91% respondents said the climate for PE investments had improved; of which 38% said it had significantly increased. The corresponding figures for 2009 showed 51% respondents considering a decline in PE activity.