M&A activity on the rise in FMCG sector: PwC report
A recent PWC report titled ‘The Indian Consumer Sector: What’s the deal?’ cited that the Indian market will see an increase in merger and acquisitions (M&A) and private equity activity in the FMCG sector. Despite the global economic meltdown, Indian corporates will continue to seek acquisitions in foreign markets in the near future.
The report stated that there is a huge demand created by emerging markets, especially in countries like India, where the Indian consumers are highly differentiated. This demand is leading to interest in investment from foreign companies who are looking for greater growth and access to market share in emerging markets.
“While the slow growth and mature profile of western markets is unlikely to be appealing, Indian companies are likely to continue to focus on high growth markets such as South-East Asia, Africa, Latin America,” the report said.
Indian Companies like Wipro, Godrej are ahead in terms of overseas acquisitions, with Godrej making several acquisitions in the last there years in Indonesia, Africa and Argentina. 2012 saw a good year in overall acquisitions, with Wipro acquiring Singapore based LD Waxon, which sells skincare and healthcare products and VLCC acquiring Malaysia’s Wyann International in November, 2012. From the International acquisition perspective, Reckitt Benckiser acquired Ahmedabad-based FMCG firm Paras Pharmaceuticals in 2011. Jyothy Laboratories, acquired 50.97 percent stake in Henkel India Ltd in 2011.
PwC’s U.S. technology industry deals leader, Rob Fisher, predicted in the report that there will be an increase M&A activity in the tech space in future.
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