According to the London-based Acquisitions Monthly, these transactions highlight the importance of international firms buying into India as an attractive source of M&A fees.

Details on completed transactions provided by India Advisory Partners indicate that between January 1 and June 30, 1999, DSP Merrill advised three deals valued at Rs 454 crore, followed closely by by ANZ Investment Bank with two deals worth Rs 450 crore. Ind Global Financial Trust came in third sealing two deals valued at Rs 94 crore.

DSP Merrill Lynch advised Air Products Rs 430 crore acquisition of Industrial Oxygen, while the latter was advised by ANZ Investment Bank. Air Products entry into the Indian industrial gases sector follows that of other international giants like Praxair, BOC and AirLiquide.

Acquisitions Monthly sees Indian M&A volumes rising in the medium term and adds that the consolidation wave in the cement sector is set to spread to other promoter-owned Indian companies, as their clasp is loosened. Larsen and Toubro's (L&T) acquisition of Narmada Cement followed a host of other buyouts by Grasim and India Cements. Moreover, commmercial pressures could further bring about a consolidation in sectors like steel and industrial engineering, it adds.

Meanwhile, India Advisory Partners sees established overseas companies continuing to consolidate control of their Indian associates and subsidiaries, buying out local partners and public shareholders. "New entrants to India will increasingly seek to acquire market share by buying companies in sectors serving the domestic market --- chemicals, food, consumer goods. Domestic companies with strong distribution systems and networks will continue to be attractive targets," according to Kai Taraporevala of India Advisory Partners.

IndiaAdvisory Partners was set up by James Winterbotham and Kai Taraporewala, both former colleagues in the Lazard investment banking group. IAP provides dedicated advisory services across the full range of skills needed by companies investing into and out of India from the entry strategy formulation through deal execution.

INSIGHT
Just a beginning

The boom in M&A activity in India is just the begining. The slowdown over the last three years had rendered a number of domestic industrial and commercial assets cheap and ripe for a takeover. Foreign companies have been eyeing the Indian market for a long time and are just waiting for the right moment to strike. Given that the economy is going to be opened further, local companies are in a hurry to consolidate where there is a lot of existing expertise (as in the cement sector) or sell out (as in power or telecom) in those sectors that require both a lot of capital and knowhow.

Aaron Chaze