Performance of unlisted Italian companies acquired by multinationals from emerging markets: The case of Indian acquisitions

This study analyzes cross-border acquisitions from India to Italy in order to understand their impact on the target company’s business sustainability. While foreign direct investments performed by emerging multinationals from Brazil, Russia, India and China (also called BRICs) have generally been studied with a macro-perspective, the present research aims to address the effects occurring at the firm level, adopting the target’s perspective. The deal’s effects are analyzed in terms of financial performance, i.e. using accounting data to assess profitability and future survival of the target, and in terms of value-added distributed to stakeholders to evaluate the positive/negative social impact of the acquisition at the local level. The methodology is mainly descriptive because of the limited availability of up-to-date and reliable data series and it is applied to eight case studies. The justification of this study lies in the recent growth of international acquisitions by emerging multinationals, which are now important players in both the global market and in Europe; and in necessity to understand if target companies preserve their capability to create economic value and to contribute to local communities. Case studies indicate that some Indian acquirers intend to develop the target’s actual business and simply don’t search for a specific asset (brand or technical knowledge) without caring for the future of the company and its employees.