As I sit here sweltering in my office one one of Londons few really hot days of the summer it feels appropriate that my thoughts should turn to India
Whenever I visit this fascinating and vibrant country I’m struck by the pace of change that the whole nation is experiencing not just in business but in all aspects of it’s development as it heads towards it’s rightful place as one of the true global players. I’m particularly keen however to compare India with it’s major global rival, China. Don’t panic! I’m not about to write a dissertation looking at the two, this has already been done by others far more qualified than me to do this! I am however interested in the M & A potential within these two emerging giants.
For a number of years M & A activity has focused on China’s demand for raw materials, knowledge and expertise and international brands. As a new breed of asset and liquidity rich smaller Chinese companies emerge onto the world stage are we about to see an explosion of M & A activity coming out of Asia? M & A in India has tended naturally to focus on larger Indian countries. Gandhi did a great deal for India in terms of removing the British Imperialist shackles however his economic policies set the country back centuries, only now are we seeing the true potential of Indian entrepreneurs as they explode onto the world stage.
This then takes me back to my earlier question-are we going to see a rapid expansion of Asian M & A activity as we see midcap companies from India and China setting out on the acquisition trail. The answer I feel is yes! I was struck at the recent Boao Forum for Asia International Capital Conference at the boundless energy Chinese entrepreneurs exude. Their aggressive approach to business and the demand for rapid growth all point towards an expansion of M & A activity and I also suspect that a the west will be surprised by the size of some of the companies coming into the sights of these emerging companies who have no real respect for an international pecking order.
Although I feel the pace of M & A activity will be slower from India I do think that we will see similar developments in the medium to long term. India this week took a huge step forward in the deal it made on nuclear power with the US and I suspect that history will show this to be a major point in India’s long term development as securing the necessary energy resource is a key factor in both improving the infrastructure within the country but also in the message in sends to western partners and investors. I disagree with the opposition in India who claim the deal sold India short and in effect has aligned India’s foreign policy totally with the US.
So I guess my question at the end of this, every blog should end with a question, is what do you, the reader think? In today’s turbulent market is the real value to be found in Asian M & A and will that be driven from the west going in or the east coming out? What are your thoughts?!
One last thing-I should confess that I have moved to write this piece into one of Soho’s better pubs-Nanobytes in case you ever find yourself here! So I’m going to raise a glass to the continued growth of India!!!!