India Inc eyes British firms

London: Indian firms, that were looking to grow bigger through acquisitions, have developed liking for British firms. Last year, Indian firms spend 45 million pounds more for takeovers in the UK than in the US.

Indian companies bought eight British businesses last year spending 228 million pounds (Rs 1938 crore), while acquisitions in the US during the same period stood at 183 million pounds, the Times newspaper reported citing a new study.

The UK deals included the 80 million pound acquisition of Premier Foods' Typhoo tea brand by Apeejay International, an Indian conglomerate.

Globally, there has been a six-fold rise in foreign takeovers by Indian companies last year - to a record 1.2 billion pounds. The value of Indian acquisitions overseas stood at 1.1 billion pounds at the beginning of May this year.

The acquisitions in Britain last year represented a 19-fold rise in value compared to 2004, according to the research by Close Brothers.

Apeejay International chief executive Karan Paul said: "All the big Indian businesses have their guys looking in the UK on a monthly basis, with their investment bankers. There is a lot of interest from Indian entities looking at mid-sized deals."

He said the value of the average Indian takeover of a British company rose by nearly five times to 28.5 million pounds last year, from 6 million pounds in 2004.

Richard Grainger, chief executive of corporate finance of Close Brothers, said: "There are a lot of linkages between the UK and India, like the language, the legal system and a large Indian community in Britain.

"India still has strong ties with the US, but the UK has the historical colonial ties and it provides an entrance to Europe."

India's robust economic growth has created enormous opportunities for investment banks, which are in line to make 276 million dollars by way of fee income on mergers and acquisitions involving Indian companies that have been announced this year, according to Thomson Financial.

In 2005, the banks' fee income from deals involving Indian companies nearly tripled to a record 468 million dollars.