As per reports, India’s total merger and acquisition activity reached a valuation of 36.9 billion USD in the year 2020. Thus, even amidst the COVID-19 pandemic and slowing down of economic activities, M&A acquisitions marked a remarkable growth with overall deal values soaring to 21 billion USD.
The main driving force behind the rise in M&A activity is the shifting consumer preferences and identified potential across various sectors. This includes specialty chemicals, FMCG, pharmaceuticals, and more.
Furthermore, the active support from merger and acquisition company in India also contributed significantly in securing cross-border deals and ensuring better investment flows across various sectors.
Let’s take a look at how M&A consultants in India are helping boost the country’s cross-border deal operation.
3 Ways in Which Merger and Acquisition Company in India Helps Cross-Border Deals
- Help decide between Merger and Acquisition
Merger and acquisition is the act of consolidating a company or its assets via various types of financial transactions. Though both the terms are often used as synonyms, there is a great deal of difference between the two.
Merger refers to the act of joining forces of two similar firms under one corporate name. Whereas acquisition refers to the act when one company completely takes over another.
A leading strategy and management consulting firm Indiacan help foreign investors enter the Indian market through cross-border deals adequately.
- Choose the type of Mergers and acquisitions
There are 4 types of Mergers and acquisitions operations as listed below:
- Horizontal M&A- Horizontal M&A takes place between two firms that belong to the similar industry and have the same products and services.
- Vertical M&A- Vertical M&A takes place between two companies that belong to similar industries but trade on different supply chains.
- Concentric M&A- Concentric M&A happens between two enterprises that have a similar customer base but trade in different products and services.
- Conglomerate M&A- Conglomerate M&A takes place between two companies that belong to two completely separate industries.
The bestmerger and acquisition company in India carries out a thorough market analysis and helps foreign investors choose the right type of M&A deal as per their business interest and future goals. This will help reduce investments, ensure long-term profitability and sustainable growth.
- Implementing the various stages of Mergers and acquisitions
A leading strategy and management consulting firm India also helps foreign firms in the various stages of M&A implementation process, which largely involves:
- Identifying & shortlisting firms and making target portfolios for improved understanding.
- Preparing deals based on the company size, financial position, market valuation, and more.
- Structuring an adequate deal strategy and entering into negotiation with target firms.
- Performing Due Diligence to ensure all the documents, data, papers, and information shared by the target firm are accurate.
- Finally, these consultancy firms also help in the post-deal integration process with detailed financial, organizational, and structural planning.
The Indian economy is evolving rapidly and is creating lucrative opportunities across various sectors. Foreign investors are attracted to the diverse business opportunities in the country. They are looking forward to entering the market through FDI, Greenfield investments, and, most importantly, via favourable M&A.
However, the competitive market structure necessitates availing help from leading consultancy firms like Tecnova. With end-to-end support, these consultancy firms will ensure effective implementation of the M&A deals with the promise of profitable business returns in the future.
Mergers and acquisitions are used as instruments of momentous growth and are increasingly getting accepted by Indian businesses as a critical tool of business strategy. They are widely utilized in a good array of fields like information technology, telecommunications, and business process outsourcing also as in traditional business to realize strength, expand the customer base, cut competition or enter into a replacement market or product segment. Mergers and acquisitions could also be undertaken to access the market through a longtime brand, to urge a market share, to eliminate competition, to scale back tax liabilities or to accumulate competence or to line off accumulated losses of 1 entity against the profits of another entity.