Thursday, June 14, 2007

Auction websites changing traditional M&A processes in India & the World

Investment bankers have found a new rival in executing merger and acquisition deals in the form of the Internet, which allows sale or purchase of a company at the the click of a mouse.

Marking a significant coming-of-age for the e-commerce industry, online auction platforms like eBay are no more just about selling or buying consumer goods. In fact, entire companies are being sold and acquired on these websites in a simpler, faster and cheaper way than the traditional methods involving a plethora of investment bankers and advisors.

The trend is catching up fast in India as well after a number of successful deals in the US and other countries.

A Lucknow-based telecom firm is seeking bids for 25% stake in the company on eBay India website, a retail outlet in Kharagpur is on sale for a minimum of Rs18 lakh, while another electric vehicle manufactruing firm from the country is also soliciting potential buyers on the website.

Besides, an operational job portal, based in Bangalore, has also listed itself for sale on the eBay USA website and is seeking buyers from across the world.

Another e-commerce website focussed on sale and purchase of a business, Biz Buy Sell, has a US-based company seeking buyer for its fully-staffed Indian software developement subsidiary in Mumbai at a base price of $500,000.

There are several other such examples on some of these auction sites.

Market experts believe prospects for such deals in India should improve further, given the growing number of Internet users and increasing awareness about such websites.

According to web traffic tracking firm comScore, India is already one of the ten most populous countries in terms of Internet users and is growing at a sharp rate.

Source: PTI

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