Although we have been facing a domestically spawned slowdown, the direct effect of the global economic crisis on our country is likely to be mitigated by the relative isolation of the Indian economy.The last 12 months or so have seen an overall decline in the level of M&A activity globally. In this paper I argue that while the factors at work globally are unlikely to affect Indian M&A, the historical conjuncture is in any case quite different in the Indian situation. I argue that the overall mood of economic crisis and stagnation will cause a squiggle in - but not fundamentally alter - the upward trajectory of M&A activity in India.

As far as M&A activity is concerned, there are two opposing forces that come into play during periods of economic stagnation such as the one the world is currently facing.On the one hand, many companies that are otherwise fundamentally strong - say because of strong brands or control over some strategically important input or market - face liquidity pressures as creditors and lenders begin to play safe. As investors attack the stock market value of such companies, they begin to offer ideal opportunities for acquisition deals. The Asian financial crisis, for example, brought several quality companies to the block that were eagerly swallowed by their local or global rivals. To the extent that economic crises create such "sell-side" deal opportunities, they have a positive impact on the level of M&A activity.

companies, economic, corporate, impact, market, financial, business, investment, trading, emphasis, capitalism, industry, merger, rationalise, acquisition, subsidiaries