Acquirers should go for stress tests of all future possibilities so that more value could be created for shareholders, a member of Tata Sons' group executive council (GEC) said today.
Referring to some overseas acquisitions made by Indian conglomerates which had gone sour, Tata Sons GEC Member Nirmalya Kumar said that acquirers should be more cautious in takeovers through better and rigorous due diligence.
"Research has shown that more than 50 per cent of the acquisitions made in India failed to create value for the acquiring shareholders," Kumar told an interactive session organised by Indian Chamber of Commerce.
Kumar said that being a corporate strategist with the Tata group, the goal at the corporate centre was to maximise corporate advantage.
The group executive council (GEC) of Tata Sons provides strategic and operational support to the company's chairman.
He said that maximisation of corporate advantage had been defined as difference between sum of the performance of all the companies and those of the standalone firms was greater than zero.
Kumar also said that synergies also played a crucial role in making acquisitions successful in every sense.
Also, interest of the minority shareholders should not get trampled, he added.