What are the determinants and consequences of overseas acquisitions by Indian firms in their internationalisation journey? Professor Raveendra Chittoor’s and Deepak Jena’s survey-based study addresses this question and highlights key issues related to overseas acquisitions, such as acquisition motivation, choice and location of acquisition targets, post-acquisition integration processes and acquisition performance
Indian companies have been aggressive dealmakers in the market for corporate control overseas during the past decade. Between 2001 and 2012, Indian companies executed more than 1,100 cross-border merger and acquisitions (M&A) transactions (Figure 1), 80% of which gave them a controlling stake, according to Zephyr, Bureau Van Dijk’s M&A database. These acquisitions were spread across multiple industries, with software and business services and pharmaceutical acquisitions being among the biggest industry groups (Figure 2).
India’s top TNCs (featured in the article “Ranking India’s Transnational Companies”) in this issue have also shown a great appetite for undertaking cross-border acquisitions in the past decade. The 25 companies that feature in our TNC list made at least 84 overseas acquisitions between FY02 and FY12, thus averaging more than three per company.1 This preference for growing internationally through acquisitions is, according to us, the key distinguishing feature of the internationalisation journey of top Indian TNCs..