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Fri, 08/22/2008 - 16:08
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India's overseas acquisitions set to rise: KPMG By Prasun Sonwalkar

acquire more companies abroad than foreign firms taking overcompanies in India, according to a latest assessment.

The study by consultants K.P.M.G., released as part of the Emerging Markets International Acquisition Tracker (E.M.I.A.T.), shows that acquisitions by Indian firms will soon outnumber those inbound deals involving foreign firmssnapping up Indian targets.

The E.M.I.A.T., which tracks trade-buyer deals between emerging and developed economies on a six-monthly basis from the start of 2003, now shows 322 completed deals where Indian trade buyers have acquired companies in the major developedeconomies.

This compares to 340 deals completed in the oppositedirection (developed economy trade buyers buying into India).

K.P.M.G. said that with outbound deals now having outnumbered inbound deals for each of the last three six-month periods, India now seemed well set to become a net "dealexporter" in the next E.M.I.A.T. in 2009.

Jeremy Butler, director with K.P.M.G.'s New and Emerging Markets practice in Birmingham, said: "This is testament to the growing power of the Indian corporate base. At a time when everyone is talking about the credit crunch and Sovereign Wealth funds, Indian trade buyers have simply continued doingwhat they've been doing for several years now.

"As acquirers, they are now serious players on the world scene. In sporting terms, there is strength in depth here too; this is not just about the headline acquisition by Indian titans such as Tata. This is about an ability to strike overseas deals filtering down throughout the Indian corporate scene." "Becoming a net exporter of deals within the E.M.I.A.T. - when it happens - is a credible enough achievement in its own right. However, it is all the more astounding when you realise just how far away the other B.R.I.C. economies are fromachieving this feat," Butler said.

"Within the E.M.I.A.T., in volume terms, India's outbound deals now represent 95 percent of the inbound total. By comparison, Russia boasts a 30 percent figure, while China and Brazil lag further behind on 12 and nine percent respectively." The E.M.I.A.T. figures for the first half of 2008 show 90 emerging-to-developed (E2D) deals set against 161developed-to-emerging (D2E) deals.

Indian buyers accounted for 50 of the 90 E2D deals and have been a major factor in helping the emerging economiesnarrow the gap on the developed economies' trade buyers.

E2D deals now represent 56 per cent of the D2E total -a massive leap from the 21 per cent registered four years ago.

While the Indian numbers have steadily risen, the other emerging economies have tended to register static deal activity numbers, K.P.M.G. said. PTI CORR KNO