India targeted M&A value slumps 26% to USD 25.5bn this yr

India targeted merger and acquisition deals’ value this year so far stood at USD 25.5 billion, down by 26% over the corresponding period a year ago, global deal tracking firm Dealogic said.

According to Dealogic, India inbound deal volume till June 22, is at the lowest year-to-date level since 2009, when it stood at USD 12 billion.

The second quarter of this year saw a significant slump in the M&A activity as just USD 3.7 billion worth of transactions were announced against USD 21.8 billion worth deals that were announced in the first quarter of 2012.

The April-June quarter saw the lowest quarterly level since the fourth quarter of 2011, when it stood at USD 3.6 billion, Dealogic said.

In a similar vein, India outbound M&As wherein Indian companies acquire assets abroad has reached USD 2.7 billion till June 22, down from the USD 6.4 billion announced in the same 2011 period and marks lowest year-to-date level since 2009, when it stood at USD 503 million.

According to experts, there has been a moderation in deal momentum this year largely owing to global economic concerns mainly around Europe and the Indian economic concerns.

A bulk of the merger and acquisition pie was cornered by domestic M&As which accounted for 86 per cent share of India targeted M&As so far this year.

With USD 29.5 billion worth of deals the share of domestic M&As in the total kitty has increased by as much as 27% on a year-on-year basis, Dealogic said.

Besides, out of the top five Indian announced M&As, four are domestic transactions led by the Sesa Goa merger.

The USD 9.5 billion merger by Sesa Goa with Sterlite Industries / Cairn India /Madras Aluminium/Vedanta Resources announced in the first quarter of this year retains the tag of the largest deal in 2012 so far.

(curtsey : money control)

Rupesh Yatesh Dalal
Head Research Department

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