India eyes African markets, resources

HONG KONG/MUMBAI - As China pushes into Africa to tap its natural resources and consumers, India wants deals of its own there to feed a booming economy and a corporate sector hungry to grow overseas.

But India is having to play catch-up as China has a tight foothold

across the African continent, stretching into nearly every country

in areas such as mining and oil.

Indian companies realise that if they don't move quickly to

expand across the globe to secure energy and customers in markets

such as Africa, China is likely to get there first.

 

"There's been a definite shift in the way Indian companies look

at Africa," said Shipra Tripathy, head of the Africa desk at the

Confederation of Indian Industry.

 

"We are now big enough to foray into what was earlier perceived

as a risky market.

 

It's not just natural resources.

 

Companies are now looking for opportunities in many

sectors."

 

China and India, the world's two most populous nations, are

battling for resources to drive their roaring economies, and are

going head-to-head when it comes to cross-border acquisition

strategies for fast growing companies.

 

That is the backdrop for an expected bid by India's mobile

leader Bharti Airtel for a controlling stake in South African

telecoms operator MTN, a company worth about US$40 billion.

 

Bharti says it is in talks with MTN, but has not yet made an

offer.

 

But investment banks are lined up to advise and finance the

deal, sources say, with other global telecom players - China Mobile

included - said to be on the fringes.

 

China Mobile said on Thursday it has not bid for MTN, but is

interested in the South Africa market.

 

A deal for MTN would be India's largest-ever cross-border

acquisition and would boost the country's presence in Africa.

 

In March, Satyam Computer Services Ltd, India's No 4 software

services exporter, announced the launch of a software development

and support facility in Egypt to tap a growing outsourcing business

in the Middle East and North Africa.

 

Top Indian outsourcer Tata Consultancy Services has a business

unit in South Africa.

 

Oil and Natural Gas Corp (ONGC), Tata Steel and Tata Motors also

do business there.

 

CHINA AHEAD China's outbound acquisitions so far this year have

ballooned to US$28,3 billion on 72 deals from US$2,3 billion and 66

deals in the year-ago period, according to Thomson Reuters

data.

 

Industrial & Commercial Bank of China Ltd (ICBC), China's

largest bank, agreed to buy South Africa's Standard Bank Group last

year for US$5,6 billion.

 

A CLSA report from 2006 said more than 900 Chinese companies had

invested in 49 African countries, from Rwanda to Niger.

 

India's cross border acquisition activity dropped 39,1 per cent

to US$6,8 billion so far this year, Thomson Reuters data show.

 

Last year, India-Africa trade grew to US$30 billion, but China's

trade with Africa jumped to double that figure.

 

In addition to oil and gas producers, African miners could come

up as potential targets, and late last year Singapore

Telecommunications Ltd, which owns more than 30 per cent of Bharti

Airtel, briefly pursued Ghana Telecom.

 

India's relationship with Africa has seen stops and starts over

the generations, but the two look to be strengthening ties.

 

Last month, India hosted the India-Africa Forum Summit, which

was attended by 14 African countries.

 

As China has discovered, tight relations with certain Africa

entities come at a price.

 

China's relationships with Sudan have come under fire

internationally, with critics saying Beijing is helping to

underwrite the violence in places such as Darfur.

 

Indeed several other risks come with overseas expansion

initiatives.

 

But with economies growing at about 10 per cent a year,

expansion abroad is as much tempting as it is a necessity.

 

Nampa-Reuters

 

Indian companies realise that if they don't move quickly to expand

across the globe to secure energy and customers in markets such as

Africa, China is likely to get there first."There's been a definite

shift in the way Indian companies look at Africa," said Shipra

Tripathy, head of the Africa desk at the Confederation of Indian

Industry."We are now big enough to foray into what was earlier

perceived as a risky market.It's not just natural

resources.Companies are now looking for opportunities in many

sectors."China and India, the world's two most populous nations,

are battling for resources to drive their roaring economies, and

are going head-to-head when it comes to cross-border acquisition

strategies for fast growing companies.That is the backdrop for an

expected bid by India's mobile leader Bharti Airtel for a

controlling stake in South African telecoms operator MTN, a company

worth about US$40 billion.Bharti says it is in talks with MTN, but

has not yet made an offer.But investment banks are lined up to

advise and finance the deal, sources say, with other global telecom

players - China Mobile included - said to be on the fringes.China

Mobile said on Thursday it has not bid for MTN, but is interested

in the South Africa market.A deal for MTN would be India's

largest-ever cross-border acquisition and would boost the country's

presence in Africa.In March, Satyam Computer Services Ltd, India's

No 4 software services exporter, announced the launch of a software

development and support facility in Egypt to tap a growing

outsourcing business in the Middle East and North Africa.Top Indian

outsourcer Tata Consultancy Services has a business unit in South

Africa.Oil and Natural Gas Corp (ONGC), Tata Steel and Tata Motors

also do business there.CHINA AHEAD China's outbound acquisitions so

far this year have ballooned to US$28,3 billion on 72 deals from

US$2,3 billion and 66 deals in the year-ago period, according to

Thomson Reuters data.Industrial & Commercial Bank of China Ltd

(ICBC), China's largest bank, agreed to buy South Africa's Standard

Bank Group last year for US$5,6 billion.A CLSA report from 2006

said more than 900 Chinese companies had invested in 49 African

countries, from Rwanda to Niger.India's cross border acquisition

activity dropped 39,1 per cent to US$6,8 billion so far this year,

Thomson Reuters data show.Last year, India-Africa trade grew to

US$30 billion, but China's trade with Africa jumped to double that

figure.In addition to oil and gas producers, African miners could

come up as potential targets, and late last year Singapore

Telecommunications Ltd, which owns more than 30 per cent of Bharti

Airtel, briefly pursued Ghana Telecom.India's relationship with

Africa has seen stops and starts over the generations, but the two

look to be strengthening ties.Last month, India hosted the

India-Africa Forum Summit, which was attended by 14 African

countries.As China has discovered, tight relations with certain

Africa entities come at a price.China's relationships with Sudan

have come under fire internationally, with critics saying Beijing

is helping to underwrite the violence in places such as

Darfur.Indeed several other risks come with overseas expansion

initiatives.But with economies growing at about 10 per cent a year,

expansion abroad is as much tempting as it is a

necessity.Nampa-Reuters

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