Top Indian companies are ending the year 2005 with a flurry of overseas deals, capping a trend of the past year that saw mergers and acquisitions worth a record $10 billion, a 52 per cent rise over the number of deals completed in 2004, a report said on Wednesday.
About 40 per cent of the transactions totaling $2.83 billion in value involved foreign companies expanding into India, The Financial Times said quoting a survey by international accounting firm KPMG.
The acquisition by Holcim, the Swiss cements group, of a 67 per cent stake in Gujarat Ambuja India for $810 million topped the list.
But Indian companies have also turned their attention overseas as they hunt for niche companies to get closer to customers or seek global scale by seizing larger foreign targets.
This month alone, in deals not included in the KPMG survey, Tata Chemicals paid Rs 5.08 billion (£64.7 million) to take over Brunner Mond, a UK soda ash manufacturer, making the combined entity the world's third largest producer of a material used to make glass and detergents.
Among other deals completed after the KPMG survey, Tata Steel, the country's largest private-sector metals manufacturer, expanded its pan-Asian footprint by buying a steel unit in Thailand while Wipro, India's third largest IT services company bought assets in Austria and the US.
Bharat Forge gained control of the largest forge components unit in China.
Merrill Lynch, meanwhile, took control of its Indian investment banking partnership after buying out the main shareholder for $500 million, the report said.
Carlton Pereira, managing director of corporate finance at KPMG told Financial Times: "This has been a strong year and the next one promises to be even better as Indian companies deploy large war chests to realise expanding ambitions."
Indian acquirers have been helped by strong domestic growth and a heady share market, which has risen nearly 40 per cent this year. This has helped companies raise equity capital at premium prices, in effect lowering the cost of capital.
The total of completed take-over transactions this year falls just short of the record 440 in 2000.
However, transactions by value, according to the KPMG figures, are marginally greater than the $9.75 billon figure five years ago, and almost twice the total of $5.7 billion in 2004.
The busiest sector by value was energy, with 11 deals totaling $2.23 billion, ahead of telecoms with 21 valued at $1.8 billion.
There were 57 deals in IT and engineering, with health care and pharma the next busiest, the report said.