May the best man win

Marquee local brands passing into foreign hands has stopped evoking desi rancour

Time was when even fizzy drinks changing ownership from Indian to foreign hands was seen as a national sellout. Remember the hoopla around Ramesh Chauhan selling Parle brands like Thums Up and Limca to globe-trotting American transnational Coca-Cola in the early nineties? Or Kwality ice cream being acquired by the Indian subsidiary of Anglo-Dutch multinational, the then Hindustan Lever Limited. Or HLL again getting hold of Tata’s Lakme and Hamam in mid nineties. 

The debate then was how Indian firms and brands in the end were incapable of standing up to the might of the deep-pocketed foreign firms, and needed to be ring-fenced and/or protected from marauders from outside our shores. Such was the fear of the foreign firm that it did not matter even if it was owned by a non-resident, like Swraj Paul’s famous aborted bid for Escorts and DCM in the early eighties.

Just scanning the headlines of newspapers over the last few months shows how much we have changed. The US-based Kellogg’s is looking at acquiring the century-old sweetmeat-and-savoury brand Haldiram’s in an over Rs 21,000 crore bid, according to one newspaper. Interestingly, the debate on this potential takeover is not around desi versus videshi but how it’s a difficult deal to execute given that the brand and the business rights are spilt geographically among three founder families.

Earlier, the country’s biggest ecommerce firm Flipkart moved smoothly to American retailer Walmart without anyone battling a nationalist eyelid. Malaysian healthcare major IHH acquired debt-ridden hospital chain Fortis and American private equity firms Blackstone and TPG Capital are reportedly in the race for another homegrown hospital brand in Medanta.

Eveready, that battery brand of our childhood, may soon lighten up the stable of American Energizer or Duracell. Canadian investor Brookfield may check into Hotel Leela, one of the troika of oldest local hotel firms, the other two being Taj and Oberoi. And French dairy major, the euro 17 billion Lactalis is gulping down local businesses —  like the Rs 1,700-crore deal for Prabhat Dairy of late, and Hyderabad-based Tirumala Milk Products sometime back.  

Why even in media, often billed as strategic, local entertainment-and-news television biggie Zee may soon count a foreigner, likely American, as a major owner according to chief executive and founder’s son Punit Goenka. Though not exactly comparable to the then hostile bid by Swraj Paul, another non-resident owned foreign firm, ArcelorMittal, is close to acquiring a big industrial unit in Essar Steel.

According to a recent report on mergers and acquisitions by CII-PwC India, Value Creation: Laying the Foundation for Mergers and Acquisitions, an average of 600-700 Indian companies were acquired annually over the last decade. The share of inbound M&As to overall foreign direct investments into the country has hovered around a fourth in the last three years or so, pointing to a robust activity involving foreign firms.      

Witness the near absence of any voice against the ‘foreigner’ gobbling away ‘our’ companies. One may argue that India, and India Inc., had got over its fear of the foreigner sometime back. And it is not that brands and businesses have not been sold to foreigners earlier. All true, but it is only now that the polity is truly shedding the last vestiges of the protected, pre-liberalised era that bred a feeling of inadequacy and inferiority that manifested in protectionism. Almost three decades of living and surviving in a near-open economy has given the confidence of being able to compete with the global best. The earlier rancour associated with “colour of money” — whether equity, investment or loan — is completely absent of late. And when selling out, the focus is to only look at the best buyer, and if it happens to be a foreigner so be it.

shailesh.dobhal@bsmail.in