The global M&A firm Dealogic has released their latest regional report showing that Indian companies have surpassed their Chinese counterparts in cross border merger and acquisitions over the past twelve months.
Indian acquisitions grew by 126 percent in annual growth, while China grew at 82 percent. The Asia Pacific region as a whole registered a 36 percent rise in overseas M&A, according to the report.
Differences between the two countries and the impact of the acquisitions vary. Indias acquisitions are almost all funded from the private sector, while Chinas have typically been state driven acquisitions tying up strategic resources for the nations longer term needs.
Regionally, Australia accounted for the most acquisitions with US$38.2 billion spent on 217 deals outside Asia. The countys largest deal was the Centro Properties Group acquisition of U.S.-based New Plan Excel Realty Trust for US$5 billion.
China and India ranked second and third in terms of acquisitions, with US$17.3 billion and US$16.1 billion respectively spent on cross region outbound merger and acquisitions, according to Dealogic. Companies in the Asia Pacific region have invested US$104.3 billion through 622 deals outside the region so far this year, a jump of 36 percent more than the same period in 2008.
The United States was the most targeted nation by companies in Asia Pacific, with US$42.7 million being spent on 207 deals, accounting for nearly 3 percent of all U.S.-specific mergers and acquisitions this year. American assets have become increasingly attractive as the nations businesses have suffered intensely during the global financial crisis. Asian businesses have had more secure savings and have been able to spend money on deals at far more attractive prices as assets reached close to fire sale levels.
The underlying commercial trend however is that Indian companies are far more assertive than their Chinese counterparts in their desire to venture overseas and their ability to raise private financing to do so. If one strips out the state-owned aspect of Chinese M&A, the amount funded by the Chinese private sector is negligible.
The Global M&A Network Atlas Awards and Annual Gala are being held next month in Mumbai. Chris Devonshire-Ellis, founding partner of Dezan Shira & Associates and publisher of 2point6billion.com will moderate the China M&A session. Details of the event are here.