You wouldn’t expect to find the terms “overvalued acquisition” and “fatter wallet” in one title but this is exactly what appears to have happened for the India based Pharmaceutical company Fortis in the past few days. Making the financial front pages across the country today is news of Fortis’ exit of Singapore based Parkway Holdings Ltd in a deal that would have them net $85 million over what they shelled out to acquire their 23.9% stake just a few months ago this March.

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The Times News Network today reported on the possible findings and suggestions of a committee set up by SEBI (Securities And Exchange Board Of India) which could have a significant impact on the M&A market within the country. According to the news agencies, the panel is expected to announce some significant changes including changes in the distribution or abolishing altogether the “Non-Compete Fees” which is usually paid to promoters as part of the acquisition deal. While the details of the announcements will become clearer over the coming days here is a quick overview of the expected changes:

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The Indian Rupee which just got its very own currency symbol is the very latest entrant in the currency symbols club associated with the US Dollar, Japanese Yen, Euro and Sterling Pound. On Thursday July 15th, the government approved a symbol designed by a post-graduate student over thousands of other options in a bid to give the Rupee its own identity. The excitement around India seems to reflect the people’s acceptance of this new symbol which will also be a symbol for the economic emergence of the country as most see it. Perhaps there is more to branding the Indian Rupee than just a symbolic identity.

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The only thing constant about markets is change! Perhaps, nowhere does this change manifest itself as clearly as in India where the economy and urban lifestyles are undergoing rapid evolution. As businesses  looking for investment opportunities in newer, brighter, upcoming segments with promises of steep growth rates and quick returns, there is no dearth of good acquisition targets. With the buzzword among companies seeking rapid growth being “boom” we often hear of a ‘boom in the retail sector’, a ‘boom in the housing markets’, a ‘boom in the consumer electronics space’ and similar financial headlines. This is often followed by a frenzy to tap into these opportunities and overcrowding in many cases. Finding themselves in a situation not as promising as they envisioned, exits are sought making it all the more difficult for companies to acquire the right assets. So how do you know if the business you’re looking to acquire is going to stay on the high growth path or struggle?

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The Euro may have weakened and European heads of states and finances may appear to be scrambling for solutions to the economic issues on news channels but all is not grim as far as business interests between India and Europe goes. Despite what appears to be tumultuous times for everyone involved, there is an upside for Indian investors seeking asset acquisition to play in the European markets. Likewise, there are reasons for European investors eying the Indian market to be optimistic about their prospects as the corridor.

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According to a recent survey by Ernst & Young 54% of the Indian companies surveyed said they are likely or highly likely to acquire other companies in the next 12 months. It’s not just acquisitions of local businesses but in recent months the interest in overseas business acquisitions as a means of expanding into global markets has also been on an upward trend.

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Despite initial skepticism in India during President Obama’s election campaign (owing to his stand on outsourcing and losing jobs to other countries) United States-India political relations are at an all time high and it’s reflecting in the market places with cross border business investments as well as acquisitions. Congressman Jim McDermott’s report “How America Benefits from Economic Engagement with India” which was released recently would come as a surprise to those who believed the US-India business relationship was a one sided flow of jobs and investments out of the US and into India.

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Growth by means of acquisitions has not been synonymous with expansion strategies for Indian state-run companies for as long as most of us can remember especially within the context of acquiring business assets overseas.  Traditionally when people discuss state-run businesses over a cup of masala – chai over at the corner tea stall topics would revolve around bureaucracy, slow growth, over-regulation and the likes.  However, that seems to be changing very quickly and the latest buzz around the tea stalls are optimistic and all about billion dollar acquisition opportunities for state-run companies.

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