Indian cross-border M&As likely to rise: survey

Cross-border merger and acquisition (M&A) deals involving Indian companies may rise considerably in the next 18 months, with the country figuring among the top four target markets for acquirers in the Asian region, a survey said.

As per a survey conducted by global consulting firms Mercer and Kroll, 83 per cent of the survey respondents expected Asian cross-border acquisitions to increase in the next 18 months.

"India is one of the top four markets Asian bidders will be targeting over the next 18 months," the survey revealed.

India is preferred as the target market by 22 per cent of the respondents. The other top three target markets are Greater China, preferred by 49 per cent of the respondents, followed by North America (29 per cent) and South-East Asia (27 per cent).

Despite this, Asian bidders are concerned by issues of bribery, corruption and undisclosed liabilities in India.

In terms of outbound M&A deals, out of the Indian companies that are planning an acquisition abroad in the next 18 months, 75 per cent are looking at North and South America.

While Indian firms are actively looking at expanding their operations into unknown territories, they face a host of potential difficulties, from understanding local labour laws and legislative requirements to assessing the background of target businesses, the report stated.

"In addition to confirming key trends related to the increasing number of cross-border transactions, the report highlights on the part of buyers the degree of complexity associated with talent retention, compensation, organisational culture and other employee-related matters," Mercer's Mergers & Acquisition consulting business Asia Pacific business leader Len Gray said.

The survey took into consideration the views of 155 senior executives of Asia-based corporations and private equity firms that have undertaken cross-border acquisitions over the past three years.