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Monday, September 19, 2011

By Pranjal Gera

M&A’s to slowdown due to Competition Act: Mahindra

Mahindra group, one of the most versatile Industrial organizations in the Indian market, said on Thursday that it feels that the new competition act may slow down the volume of Mergers & Acquisition (M&A) in the Indian market. It is to be mentioned here that Mahindra have been in a number of M&A activities in last few years. The firm has already snapped-up as many as 28 assets of worth over USD 1.8 billion.

In a statement given at the 5th Annual CFO India Forum of Mahindra Group, Vice-president for Mergers & Acquisitions Vijay Paradkar said that in the past three-four years, the group did 28 transactions aggregating around USD 1.8 billion. He added that Mahindra is a very conservative group and it could close so many transactions because of the slowdown when valuations were low.

While further elaborating the impact of the Competitions Act, Mr. Paradkar said that the new Act will be more helpful for the smaller firms, as compared to the large firms like Mahindra.

The Competition Act that came into effect from June 2011 is believed to have an adverse impact on the level of competition in the Indian market. The new Competition Act seeks to regulate voting rights, acquisition of shares and M & A deals.

The automotive arm of the group – Mahindra & Mahindra – has been into a number of acquisitions in past two years that includes the likes of Acquisition of electric car maker Reva and South Korean SUV (Sports Utility Vehicle) maker Ssangyong.

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