Does a company from an emerging market value a company in a developed market in a different way?
Often synergies that companies can find with an acquisition target lead them to value a company differently. The price-earnings ratios in Indian equities right now are higher than those in the US and that may mean that Indian companies can raise money cheaper than an American company. Valuations are also often driven by what someone is prepared to pay. For information technology, the valuation view of a company changes with the ability to outsource work back to India. So an Indian company will obviously have that advantage while an American company may have to work without that when deciding on the value of another American company. Then there is the question of growth. Indian companies that want to serve the huge growing Indian market will value a company like Jaguar-Land Rover differently than one that is not looking to serve a high-growth market. Then again, another objective of an acquisition is to spread the risk and a company from emerging economies can do that by buying into a c
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