- Indian firms’ European acquisitions often fail to justify price paid and capital used
- 10 of 15 deals ended in write-downs, forced sales, insolvency, or debt restructuring
- Tata Steel’s Corus and Suzlon’s REpower acquisitions showed significant financial losses
Indian companies acquiring European businesses have often presented these deals as opportunities to expand globally, access technology and enter developed markets.
But a review of 15 such acquisitions has raised questions about whether the price paid and the profitability delivered justify the capital deployed.
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In a November 3 post on X, investor and analyst Ishmohit Arora highlighted the weak financial outcomes of several overseas acquisitions.
Online platform Cofactco, agreeing with his assessment, said on X that 10 of the 15 transactions ended in write-downs, forced sales, insolvency or debt restructuring. The review suggests that buying European companies deserves an “orange or yellow flag” when assessing capital allocation.
Tata Steel's acquisition of Corus stands out. Its European business lost money in nine of its first 12 years. Suzlon bought REpower for around 1.4 billion euros and later sold it for 1 billion euros. Dr Reddy's paid 480 million euros for Betapharm, which was subsequently valued at just 90 million euros.
Other deals also struggled. United Spirits acquired Whyte & Mackay for 595 million pounds before selling it for 430 million pounds.
Wockhardt's acquisitions of Negma in France and Pinewood in Ireland contributed to financial pressure and debt restructuring by 2009. JSW Steel attempted to sell its Italian steel assets four years after acquiring them.
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Purchase Price Often Determines The Outcome
The review also questioned the profitability of more recent acquisitions. Tata Steel's European business recorded a 4.4% EBITDA margin in FY26, while its UK operations continued to lose money.
JLR reported a post-tax loss of 244 million pounds in FY26 and burned around 1 billion pounds in cash during the last quarter.
Apollo Tyres' European business generated an EBIT margin of just 0.7%. Motherson's polymer division, which includes Peguform, delivered a 6.9% EBITDA margin against 8.8% for the group.
The analyst argued that acquisition prices matter even more when businesses operate on low margins. Motherson paid around 25 million euros for a minor German business generating 750 million euros in revenue, while Tata bought JLR for less than half the price Ford had paid.
The warning is not that every overseas acquisition will fail. Rather, weak profitability, expensive valuations and debt-funded purchases can turn global expansion into a costly capital-allocation decision.
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