You need a defence strategy

Author: | Published: 1 Jul 2008

The history of hostile acquisitions in India has been fraught with unsuccessful bids. Listed companies have been wary and sought both traditional and new defence mechanisms to protect themselves against hostile approaches. The structural measures adopted by target companies (and their promoters) have played a part in averting hostile bids. India's regulatory framework, and nationalist sentiment, has also helped create an environment hostile to hostile offers.

With liberalisation, however, a number of these environmental barriers are being dismantled. Indian companies may soon face a wave of hostile acquisitions.

India has not provided a great stage for hostile acquirers. The ratio of successes to attempts demonstrates their limited precedent. Notable attempts include the ITC bid for East India Hotels, Lord Swaraj Paul's bid for Escorts and DCM, and ICI and Atul Choksey's bid to acquire Asian Paints; Alcan and Sterlite's bid for Hindalco, India Cement's bid for Raasi Cement, and Dalmia...