The deals herald the emergence on the world stage of global Indian entrepreneurs in manufacturing, and indicate that India is becoming an international hub for metals, petro-products and auto components. Global leaders The rise of the manufacturing giants follows that of services firms, like TCS, Wipro and Infosys, who have all left their mark globally. Corus has an international workforce of thousands Now ambitious Indian conglomerates are thinking of either crashing into the Fortune list, or vastly improving their existing position.
Notable cross-border acquisitions Some of the Notable cross-border acquisitions in the year are: While this number may not be significant when compared on a global scale, this number is significant in the global context. India Plays with Global Expansion Indian companies are using all the tricks of the trade to go global: The scale and the business share may not be significant today, but Indian businesses are slowly but surely establishing themselves abroad.
Korea has become a classic business case study. Tata acquired a loss making unit - and without any layoffs, turned the loss making unit around. This built enormous goodwill and reputation for Indian companies in S.
Given this mentality, one should not be surprised if Indian companies make a major acquisitions in S. Tata-Corus deal if it succeeds will mark a new beginning for mega deals involving Indian companies. Why opt for Acquisitions Indian companies have long practiced conservative business practices, have maintained almost zero debt and are in very good financial health.
This when coupled with access to significant pools of capital - either foreign debt or stock markets - creates an ideal situation for acquisition abroad. Another potent power which Indian companies can leverage is its vast pool of highly talented human resources.
All this when combined together creates an ideal conditions for Indian companies to expand abroad. The reasons for cross border acquisitions by Indian companies stems from their traditional thinking: Reduce risk and build global competencies.
Cross-border acquisitions make natural sense for Indian firms. The five main reasons pretty much in the same order why Indian companies opt for acquisitions are: The lure of access to global markets.
Leveraging the synergy with the existing businesses Strengthening the acquired company - via better management Reduce competitive threats and vulnerability to other global giants Create a Global Company. Inthe largest number of acquisitions were in the pharmaceuticals sector, followed by IT and manufacturing sector.
Indian companies are buoyed by strong local demand, red hot stock market, strong management capability and a desire to move up the value chain. Indian managers have the vision to go global - this vision is further encouraged by brain gain, when experienced expiates are returning back to India and using their rich experience and capability to help local firms expand abroad.
Risks in Cross-Border Acquisitions Cross-border acquisitions are always fraught with risks. Indian companies also have to face a lot of risks when compared to European, Japanese and American companies.
The five biggest risks Indian companies face cross-border acquisitions are: Risk of overpaying for the acquisition or Risk of over-leveraged acquisition In a competitive bidding scenario, there is a high possibility of over bidding for the acquisition, and that may result in Indian firms over-leveraging for the foreign acquisition.
This risk is particularly very high in a cyclical markets when the market is on the upswing. Risk of downturn in the global market Companies which deal in commodity products: If there is a downturn in this market, then Tata Chemicals will be in trouble.
Though this risk exists in all acquisitions, the risk is particularly greater in a cross-border, cross-cultural acquisitions. For example when Tata Motors was bidding for Daewoo truck division, The biggest challenge for Tata Motors was to convince the bankruptcy courts that Tata Motors are a serious about their bid and had a viable revival plan.
Toughest challenge for Tatas was to integrate Korean workforce with the new Indian-Korean management. Similarly, when Indian companies acquired American firms in earlythere were cultural integration issues - where American employees were reluctant to work under the Indian management. Government Regulations can affect Global Markets Sectors like health care, Pharmaceuticals, and Energy are highly regulated by governments.Videocond2h Malaysia.
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The second approach is called the 5D’s and was proposed by Niti Bhan from Emerging Futures Lab. From multinational companies’ perspective (MNC), there is a growing interest in the potential market of developing countries on the small.
consumer durable - Free download as Powerpoint Presentation .ppt /.pptx) or view presentation slides online. PONDICHERRY UNIVERSITY (A Central University) DIRECTORATE OF DISTANCE EDUCATION To highlight the origin and development of MNC’s, and Many emerging-market governments will have to decide what level of social services to.
Emerging markets multinational enterprises Posted on May 6, by zvictoria Emerging market multinational enterprises (EMME) is a key term being discussed by .