Indo-German M&A Development in 2022

Af­ter a tor­ren­tial re­cord-brea­king year of M&A ac­tivity in 2021, the deal ma­kers ap­pear to have step­ped off the ac­ce­le­ra­tor in the first half of 2022. The glo­bal M&A ac­tivi­ties, re­co­ve­ring from the CO­VID-19 pan­de­mic re­ached un­pre­ce­den­ted le­vels of USD 5.9 tril­lion in deal va­lues in 2021 ac­cor­ding to the ‘Glo­bal M&A Re­port Midyear 2022’ by Bain & Com­pany. Ac­cor­ding to the same re­port, the ag­gre­ga­ted glo­bal deal va­lues by the first half of 2022 re­du­ced by 20% com­pa­red to the pre­vious year but could still re­ach an ex­tra­po­la­ted va­lue of USD 4.7 tril­lion in deal va­lue by the end of 2022.

PE mul­ti­ples re­cor­ded an aver­age of 15.4 ti­mes in 2021 with in­dus­tries such as IT and health­care de­man­ding 25 ti­mes and 20 ti­mes re­spec­tively. The aver­age PE mul­ti­ples in Q1 of 2022 fell shar­ply to 11 ti­mes but re­co­vered to 16.7 ti­mes in Q2 of 2022. This in­di­ca­tes that alt­hough 2022 glo­bal M&A ac­tivity could fall short of the ac­tivity in 2021, it could still li­kely be one of the stron­gest years of the past 20 years. This also in­di­ca­tes that the mar­kets are still re­si­li­ent, pri­vate equity po­ckets are still deep and the fun­da­men­tals of good deals still exist.

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Note: See 'Glo­bal M&A Re­port Midyear 2022' by Bain & Com­pany.

M&A in Germany

Alt­hough Ger­many star­ted out in 2022 by kee­ping pace with 2021 sta­tistics, March 2022 saw a clear de­cline in the num­ber of deals with the ef­fects of the geo­po­li­ti­cal ten­si­ons bet­ween Rus­sia and Ukraine, the im­pen­ding in­fla­tion and the con­ti­nuing supply chain pro­blems which ne­ver re­sol­ved af­ter the on­set of the CO­VID-19 pan­de­mic. Ac­cor­ding to the 'Ger­man M&A Trends', 32 deals were an­noun­ced in Ger­many in March 2022 as against 53 in March 2021 and the over­all deal va­lue in Q1 of 2022 was 70% lo­wer than Q1 of 2021 which in­di­ca­tes that alt­hough smal­ler deals are still on, the lar­ger deals are be­com­ing ra­rer. The po­ten­tial shift in the en­ergy and gas mar­kets could bring about fur­ther un­ex­pec­ted chan­ges as the win­ter ap­proa­ches.

M&A in India

Da­ta­site, a lea­ding SaaS tech­no­logy pro­vi­der for the M&A in­dus­try world­wide, re­por­ted ap­prox. 174 deals in In­dia in Q1 2022 (28% YOY growth) alone and ex­pects to wit­ness con­ti­nued strong growth th­roug­hout the year. As has been the case for the past de­cade, the Tech­no­logy, Me­dia and Te­lecom (TMT) in­dus­try led the M&A mar­ket at USD 11.5 bil­lion and clai­med 6 of the top 10 lar­gest deals in the coun­try in Q1 2022 fur­ther fu­el­led by the CO­VID-19 dri­ven di­gi­tal trans­for­ma­ti­ons. Cur­rently, In­dia is in the pro­cess of amen­ding its anti-trust law which will re­quire M&A deals above USD 252 mil­lion to go th­rough an an­ti­trust ap­pro­val pro­cess if the par­ties in ques­tion have sub­stan­tial busi­ness ope­ra­ti­ons in In­dia. In this re­gard, In­dia fol­lows suit to va­lue-ba­sed th­res­holds man­da­ted by coun­tries like Ger­many (th­res­hold of USD 407 mil­lion) and Aus­tria (th­res­hold of USD 204 mil­lion) as well (Bloom­berg). Along with the an­ti­trust law amend­ment, the In­dian go­vern­ment is also see­king to re­duce the time li­mit for ap­pro­val of mer­gers to 150 days from the exis­ting 210 days to ex­pe­dite the ap­pro­val pro­cess.

Indo-German M&A landscape

March 2021 mar­ked 70 years of es­ta­blish­ment of di­plo­ma­tic re­la­ti­ons bet­ween In­dia and Ger­many. The In­dian Mi­nis­try of Ex­ter­nal Af­fairs publis­hed a bi­la­te­ral brief in April 2022 which out­lines se­veral coope­ra­tion agree­ments that both coun­tries are par­ties to. The full con­tent of the brief is avail­able here. In the area of bi­la­te­ral trade, Ger­many is In­dia’s lar­gest tra­ding part­ner in Eu­rope and the 7th lar­gest FDI source for In­dia. The ‘GIZ’ (Deut­sche Ge­sell­schaft für In­ter­na­tio­nale Zu­sam­men­ar­beit (GIZ) GmbH) has been working jointly with part­ners in In­dia for over 60 years to pro­mote sus­tai­nable eco­no­mic, eco­lo­gi­cal and so­cial de­ve­lop­ment. The cur­rent key fo­cus of the part­ners is on re­ne­wable en­er­gies and en­ergy ef­fi­ci­ency. GIZ has se­veral pro­jects run­ning in par­al­lel ad­dres­sing the goals of the two coun­tries.

As far as the M&A sce­na­rio bet­ween the two coun­tries is con­cer­ned, alt­hough the num­ber or va­lue of deals bet­ween Ger­many and In­dia may still be a mi­nis­cule por­tion when com­pa­red to the glo­bal sta­tistics, there are se­veral mea­ning­ful in­vest­ment ex­pan­si­ons which are con­ti­nuously being un­der­ta­ken. Some ex­am­ples are sta­ted be­low.

Recent German investments in India

  1. In Fe­bru­ary 2022, Ro­bert Bosch GmbH an­noun­ced its in­ten­tion to in­vest ap­prox. USD 260 mil­lion in In­dia over the next five years. The com­pany fur­ther an­noun­ced that half of the in­vest­ment will be di­rec­ted towards lo­ca­li­sa­tion of ad­van­ced au­to­mo­tive tech­no­lo­gies and the other half towards di­gi­tal plat­forms such as Mo­bi­lity Mar­ket­place and Mo­bi­lity Cloud Plat­form.
  2. Also, in Fe­bru­ary 2022, the Ger­man pa­cka­ging so­lu­tion pro­vi­der Mul­ti­vac Group in­ves­ted ap­prox. USD 7.4 mil­lion to es­ta­blish a sa­les and pro­duc­tion site in Ra­jast­han, In­dia. The in­vest­ment is ai­med at ser­ving cu­st­omers bet­ter with the re­gio­nal pro­xi­mity and em­ploy­ing at least 100 staff mem­bers from Ra­jast­han.
  3. In 2021, Ger­man au­to­mo­tive com­pon­ents ma­nu­fac­turer We­basto ex­pan­ded its in­vest­ment in Pune, In­dia by in­ves­ting ap­prox. a fur­ther USD 34 mil­lion to set up a sun­roofs ma­nu­fac­tu­ring fa­ci­lity ba­sed on the ro­cke­ting de­mand for sun­roofs from the cu­st­omers in In­dia and neigh­bou­ring na­ti­ons.
  4. ZF Fried­richs­ha­fen AG, the Ger­man auto com­pon­ents ma­nu­fac­turer con­ti­nues to in­vest in In­dia, the la­test trench being ap­prox. USD 200 mil­lion an­noun­ced in June 2021, with the in­ten­tion of ma­king In­dia the Group’s glo­bal sour­cing hub and a por­tion of the in­vest­ment to be al­lo­ca­ted to the tech cen­tre in Hy­dera­bad, In­dia towards glo­bal R&D as­si­gn­ments.

Recent Indian investments in Germany

  1. Wi­pro, a lea­ding glo­bal in­for­ma­tion tech­no­logy, con­sul­ting and busi­ness pro­cess ser­vices com­pany, set up a Di­gi­tal In­no­va­tion Hub in Düssel­dorf, Ger­many in 2020 which ser­ves as the com­pany’s flagship cen­tre in Eu­rope and of­fers di­gi­tal trans­for­ma­tion ex­per­tise to com­pa­nies in Ger­many and also col­la­bo­ra­tes with uni­ver­si­ties to de­ve­lop ca­reer op­por­tu­nities for young gra­dua­tes.
  2. Also, in 2020, Tata con­sul­tancy ser­vices (TCS), an IT ser­vices, con­sul­ting and busi­ness so­lu­ti­ons or­ga­ni­sa­tion, ac­qui­red 100 per­cent sha­res of Post­bank Sys­tems AG from Deut­sche Bank AG as part of Deut­sche Bank AG’s stra­te­gic move to con­so­li­date its IT plat­form for the re­tail ban­king brand with their al­re­ady trus­ted IT ser­vices part­ner TCS.
  3. In 2019, JBM Group ac­qui­red a ma­jo­rity stake in Linde-Wie­mann GmbH, a Ger­man auto com­pon­ents ma­nu­fac­turer, Hero Mo­to­Corp es­ta­blis­hed its first glo­bal R&D Cen­tre near Mu­nich and Lar­sen & Tou­bro group ac­qui­red the Ger­man IT firm Niel­sen + Part­ner to strength its ban­king and fi­nan­cial ser­vices soft­ware seg­ment, ma­king it an event­ful year with re­spect to M&A tran­sac­tions.


An emer­ging trend in M&A tran­sac­tions, not just bet­ween In­dia and Ger­many, but also glo­bally, has been a strong fo­cus on sus­tai­na­bi­lity and en­viron­men­tal pro­tec­tion. Across na­ti­ons, go­vern­ments are pla­cing ex­cee­ding em­pha­sis on com­pa­nies and in­dus­tries being more en­viron­men­tally con­scious and are spe­ci­fy­ing se­veral re­gu­la­ti­ons to en­sure such sus­tai­na­bi­lity. As a di­rect ef­fect, se­veral pri­vate equity in­ves­tors / ven­ture ca­pi­ta­lists as well as stra­te­gic in­ves­tors are in­te­res­ted only in those deals that com­ply with the sus­tai­na­bi­lity re­qui­re­ments and those that can contri­bute in some man­ner to the so­cial de­ve­lop­ment. Tar­gets who want to be the fo­cus of M&A deals, the­re­fore, need to align them­sel­ves ac­cor­din­gly. Howe­ver, as deal ma­king con­ti­nues at a good pace, the out­come of the ef­fects of the Rus­sia-Ukraine war, un­sett­led re­la­ti­ons bet­ween US-China, shift in en­ergy and gas re­sour­ces and un­pre­ce­den­ted in­fla­tion ra­tes will also de­fine the fi­nal count of the M&A deals in 2022.

The bi­lin­gual team at Eb­ner Stolz brings the ne­cessary in­ter­na­tio­nal ex­pe­ri­ence to as­sist you in your in­vest­ment ef­forts in In­dia and Ger­many and pro­vide sup­port in the areas of au­diting, tax ad­vice, le­gal ad­vice and cor­po­rate ad­vice. A re­cent fea­ther to our In­dia Desk cap has been the suc­cess­ful ac­qui­si­tion of Rhein­per­Che­mie GmbH, Ger­many by Ca­li­bre Che­mi­cals Pvt. Ltd., In­dia. Eb­ner Stolz ad­vi­sed Ca­li­bre and hand­led the re­le­vant fi­nan­cial, tax and le­gal as­pects of this tran­sac­tion and the pre­ce­ding due di­li­gence with a mul­ti­di­sci­pli­nary ap­proach from a sin­gle source. In ad­di­tion to the fi­nan­cial, tax and le­gal due di­li­gence, Eb­ner Stolz also sup­por­ted the ent­ire pro­cess up to the si­gning of the purchase agree­ment. Read the com­plete deal note here.

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