Indian Brand Equity Foundation (IBEF) states that the total Merger and Acquisition (M&A) deal value in India reached 21 billion USD, which is a two-time increase over that witnessed in 2019. This impeccable growth would not have been possible without the active assistance from several reliable business consulting firm in India, which have been continually helping foreign organizations with India-specific strategies to gain fair M&A deals, and thereby, consolidate their foothold in the Indian market.
The following section elaborates on how merger and acquisition firms are helping foreign clients in these complex corporate transactions and cross-border deals.
3 Ways in Which Consulting Firms are Assisting Foreign Firms to Gain Fair M&A Deals in India
The Indian market is extremely complicated owing to its rapidly changing customer behavior, intricate legal structures, and intense business competition across various sectors. Moreover, almost 90% of Indian businesses are family-owned. All these factors make M&A transactions a complicated genre for a foreign organization that does not possess fair insights into the market. To this end, merger and acquisition firms in India help foreign organizations with comprehensive support, which involves:
- Identifying the Type of Corporate Transactions to Choose
Merger and acquisition is a corporate transaction that involves the consolidation of assets, shares, or companies through various types of legal and financial transactions to improve market presence in a particular business sector.
However, though the terms merger and acquisition are often used as synonyms, they are widely distinct. A merger occurs when two companies join their forces together and come to exist as a new corporate entity. On the other hand, acquisition refers to a financial transaction in which one firm completely takes over another or consolidates the maximum of its shares to gain complete control over it.
Both mergers and acquisitions come with their respective benefits. A renowned business consulting firm in India can help foreign organizations identify the type of corporate transaction that will work best with their business interests, and therefore, ensure sustainability and profitability.
- Choosing the Best Type of M&A Activity
M&A activities are categorized into 4 types which include:
- Horizontal M&A- Occurs between two firms that trade on similar products and services.
- Vertical M&A- Takes place between two firms that have different supply chains but belong to the same industry.
- Concentric M&A- Occurs between two companies that have the same customer base but different products and services.
- Conglomerate M&A- Takes place between two firms that belong to completely different industries and have distinct customer chains.
Each of these M&A types offers respective advantages like:
- Horizontal M&A helps to increase the supply chain.
- Vertical M&A helps to reduce production costs.
- Concentric M&A helps to diversify products and services.
- Conglomerate M&A improves synergies, increases market share, and widens the customer base.
Indian business consulting firms carry out thorough research and help foreign organizations choose the best type of M&A while investing in the country’s industries as per their definite goals. This enables them to reduce investment risks and achieve a competitive edge.
- End-to-end Assistance in the Execution of Different Stages
Lastly, merger and acquisition experts of professional consulting firms, like Tecnova, help foreign organizations to strategize and execute all the essential stages of M&A, which involves:
- Identification and shortlisting of target firms.
- Creating target profiles and preparing deals.
- Undertaking negotiations.
- Managing due diligence.
- End-to-end post-acquisition integration management and monitoring.
Due to such extensive support, foreign organizations are increasingly collaborating with Indian business consulting firms so that they can achieve profitable business opportunities. This is further boosting the M&A activities in India and aiding the growth of several businesses across sectors.