Indian firms go on acquisition spree in UK

Aug. 20: The United Kingdom has emerged as a prime location on India Inc’s global acquisition map with deals worth $1.2 billion taking place in the first six months of this year, a report says. British firms, on the other hand, have also intensified their hunt for businesses in India and have already entered into acquisition deals worth $12.9 billion.
"The UK is set to be the number one acquirer of Indian businesses and also the prime acquisition target for Indian companies this year, and there is still a huge untapped potential in the subcontinent that UK firms are missing out on," a report by global financial adviser Grant Thornton said. The acquisitions made by UK firms here have witnessed a jump of over 41 fold over last year’s deals valuing $310 million, while those entered into by Indian businesses in the UK has risen three-fold, the report said.
"Strong historical ties between the UK and India combined with the rapid growth experienced by the Indian economy had led to some very large deals, although there was still underlying weaknesses in the overall picture," Mr Anuj Chande, International Business Partner and head of Grant Thornton’s South Asia Group said. This year, so far, Indian firms valuing more than $14.5 billion were acquired by overseas buyers through 78 deals. Of this, UK-based Vodafone stole the show with the $10.9-billion acquisition of Essar from Hutchison Telecommunications International.
Barring this deal, the value of UK acquisitions is spread over a total of three deals. In the first six months this year, Indian firms have spent as much as $1.2 billion on UK-based companies against $332 million invested on acquisitions in the US, the report showed.
Over 119 international acquisitions were completed in 2006 by domestic firms, which have already made 63 deals in the first six months of the current year. Of these 63, seven were acquisition in the UK. The lion’s share of India’s acquisition in the UK is of spirits giant UB Group which paid almost one billion dollars for Scotch whisky distiller Whyte & Mackay. This year’s international acquisition patterns have so far favoured raw materials, while the Essar deal in telecom sector led in terms of value.