According to the study, 171 M&A deals worth USD 4.5 billion have been concluded in the last ten years. Germany is the third most active European acquirer of companies in India.
Acquisitions of Indian companies in Germany
According to the study, Germany is the most popular M&A destination for Indian automotive companies, as the country is considered a global hub for automotive investment and is the second largest export market for Indian automotive component manufacturers. In addition, given the rapid development of the software industry, cash-rich Indian IT companies have been making acquisitions around the world to expand their technology portfolio and customer base, as well as to attract experienced talent.
Another factor for increasing Indian investments in Germany is likely to be Brexit. According to Dr. Christoph Eppinger, auditor and partner at Ebner Stolz, "While the UK has historically been the leading investment destination in Europe for Indian companies, the Brexit could increase Germany's popularity as a foothold for Indian companies in the EU, as they need an alternative to consolidate and manage their EU operations."
Acquisitions of German companies in India
M&A trends underline the strengths of the two states, as sectors such as automotive, pharmaceuticals and IT lead the business activities, favoring synergy opportunities also for German companies. The more than 600 Indo-German joint ventures in India regularly show very successful cooperation, despite the different business environments of the two states.
It is noteworthy here that less than 30% of all acquisitions by German companies in India were complete takeovers. This indicates that German companies prefer to retain Indian co-partners in order to meet challenges of doing business on the subcontinent with their local know-how and management.
M&A activities after the Corona pandemic
Since the beginning of 2020, the Corona pandemic has been hampering M&A activity worldwide and, given the rise in demand via digital marketplaces, will bring significant changes in post-pandemic times as well. Tanwir Shirolkar, Senior Director at Nexdigm says, "The transaction trend in the coming years is towards digitalization. E-health, e-technology and e-retail are among the sectors that have seen a lot of deals in the last year and a half, and this interest is expected to increase even more. The report suggests that post-pandemic artificial intelligence, cloud adoption, data security, healthcare technology and green energy are some of the key areas that will drive business."
Note: You can download the entire study here. Please do not hesitate to contact Ebner Stolz if you have any questions about the study.