Companies of BRIC nations prefer acquisitions within their borders

NEW DELHI: Majority of businesses in BRIC nations prefer acquiring firms within their borders as they are confident and aware of the local market forces, a study conducted by trade body Assocham and consultancy firm Grant Thornton said.

"Perhaps surprisingly, Brazil, Russia, India and China (BRIC) countries (90 per cent) continue to place more importance on making acquisitions within their own borders, according to the study.

Knowledge of local market forces and drivers are certain key reasons for which a domestic acquisition remains the most likely option. "This may reflect the general feeling of confidence within that region," said chamber secretary general D S Rawat.

As per the study, 85 per cent of acquisition-minded businesses have stated that they expect their acquisitions to be domestic compared to 33 per cent who are looking at cross-border deals.

Globally, North America (91 per cent) and Japanese firms have the greatest appetite (94 per cent) for domestic acquisition, it said.

M&A activity is being driven by growth hungry companies in a tepid economic environment, the ageing population of the west and a strong access to funding, Rawat added.