Cross border (Indo-US) mergers and acquisitions

Abstract

The Indo-US sector has seen a lot of merger activity over the past 5 years and a significant chunk is explained by three main industries of IT/ITES, Pharmaceutical and the automotive industries. There is a clear theme behind the strategic rationale behind these deals and our research shows that this is clearly dependant on the stage of evolution and the characteristics of the particular industry. The main reasons for the acquisitions in these sectors have been 1. To acquire capabilities,2. To gain entry into new markets and3. To expand their market share Capability based acquisitions is a relatively new phenomenon and is being seen in huge numbers in the IT/ITES and very significantly in the Pharmaceutical sector. It is not seen in the automotive sector at all. Our research comes up with the following conditions under which acquisitions tend to be capability based.