Impact of Overseas Mergers & Acquisitions on Value Creation of Indian Companies

Globalization, a tempting apple that every country wants a bite…including India. It’s this desire to explore and conqueror the international business world, that’s fuelling the Indian wagon. Though the current economic climate and the rupee value still seem to dominate the decisions made in the Indian M&A arena, a lot of other motivations lie in the shadows that determine the fate of these large scale marriages.Since the past decade India Inc. has tried to leave its global footprints not only in high margin markets like US and Europe but also in high volume markets like Africa and China. Though companies still rely on the perfect equity debt mixtures as the basic recipe for the M&As, an emerging trend of conventional methods using asset based loans and financial permutation combinations have gained quite a spotlight.Through all herculean efforts that goes into painting a very colourful picture about these transactions, what still remains as a fundamental question is the amount of value that is generated from these humongous and hyped M&A deals.The M&A phase continues to be like a walk through a labyrinth of mirror and smoke, we have to wait for the smoke to recede to figure out if it was worth taking the walk and spending the dime.This research intends to serve as a prism that refracts white light thus revealing: the core of these lucrative M&A deals, value they have been able to bring back home to the company’s stakeholders specifically the company itself and its Shareholders and whether M&As should still be preferred as a growth strategy.