Indian firms buy multinationally
An article in today's Financial Times ("Corporate India is finding the confidence to go global", 10/03/06) argues that Indian firms, long happy to stay in India, are move quickly to become multinational. As the article notes, "Fuelled by a booming economy and access to cheap international finance, deal sizes and volumes are growing ever larger." That's thanks to growing management expertise and more funding available.
Examples:
- Tata Tea, which owns the Tetley brand, bought a 30% share in US-based Glaceau, a bottler of flavored water.
- Tata Coffee (its sister company) acquired U.S.-based Eight O'Clock Coffee Company for $220 million. Eight O'Clock is third largest US retail coffee brand by volume, behind Folgers and Maxwell House.
- E-learning firm Tata Interactive Systems (yet another sibling) acquired Swiss-based Tertia Edusoft AG, Switzerland's leading provider of regulatory and compliance training.
- Appliance maker Videocon, in a partnership with US equity fund Ripplewood, bought South Korea's Daewoo Electronics in a $700 million deal.
- Generic drug maker Dr Reddy's Laboratories bought Germany-based Betapharm for $572 million.
- Wind turbine maker Suzlon Energy acquitted Belgium-based Eve Holdings for spent $548 million.
- IT company Wipro acquired a bunch of smaller companies: Portuguese IT company Enabler; US-based computer aided design (CAD) firm Quantech Global Services LLC; US-based cMAngo, which deals in business service management (BSM); and Finland-based Saraware Oy, a company specializing in software for telephone companies.
As the article points out, Indian firms haven't quite gotten into the billion dollar acquisition arena yet, but that may not be far off.
Of course, India still lacks the size of companies in China, South Korea and Japan, let alone outside Asia. It faces a number of potential pitfalls while it plays catch-up. Top of the list is a collapse in confidence and fund-raising ability that would be caused by an increase in interest rates and falling equity markets.
9:44:14 PM 
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