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India emerges from the economic downturn

13 August 2010

Following the publication of Allen & Overy's first ever M&A index, Corporate partner Ed Barnett gives his views on what's happening in that area in India.

The Indian market

India's mergers and acquisitions (M&A) market is extremely buoyant and the country's economy is seeing extraordinary growth compared to its Western counterparts.

Inbound M&A activity has been dominated by global corporates expanding their existing operations or pursuing organic growth in India, as well as Indian corporates looking for targeted opportunities.

The regulated industries are the main focus of activity as global financial services and insurance companies look to capitalise on the wealth of the burgeoning middle class in India.

India and the emerging markets

The most significant development in M&A activity over the last three years is the interest of Indian corporates' in emerging markets. 

India has emerged stronger than most from the global economic downturn and its appetite for energy resources to fuel the country's growth has not abated. 

Activity in the Indian energy sector has bucked the global trend, with deal volumes increasing over the past three years and already at the same level this year as was achieved in the entire of 2007.

The country's focus in the short to medium term is on acquiring assets (in particular mining assets) in emerging markets, primarily China, Brazil and Indonesia. 

Meanwhile more and more Indian corporates are setting their sights on Africa – Bharti Airtel's takeover of Zain's African units is the most significant Indian M&A deal of the year so far. 

India and the UK

Despite its focus on emerging markets, Indian corporates will continue to invest and expand in mature markets – the Indian conglomerate Essar Group's London IPO is one of the largest of listings in the London market this year. 

The historical and cultural ties, as well as similarities in the countries' legal systems, mean there is real potential for more activity between India and the UK. 

The UK has the professional standards and approach that India is replicating while the UK's capital markets will continue to be interested in being part of the Indian story. 

UK Prime Minister David Cameron is right to focus on a balanced relationship which represents the interests of both parties, but the UK will be competing with emerging markets when trying to attract investment from India.

Further information

Find out more about the Allen & Overy M&A Index and download the report.

 

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