Study on Indian-German corporate transactions by Nexdigm and Ebner Stolz

While Ger­man in­ves­tors are fo­cu­sing on the growth po­ten­tial of the In­dian mar­ket, Ger­many is seen by In­dian com­pa­nies as a stra­te­gic lo­ca­tion in terms of in­fra­struc­ture, lo­gistics and re­se­arch and de­ve­lop­ment. The Nex­digm-Eb­ner Stolz study "Enab­ling Col­la­bo­ra­tive De­ve­lop­ment - Indo-Ger­man deals in a de­cade" high­lights tran­sac­tions in the Indo-Ger­man trade cor­ri­dor.

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.

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