According to audit, tax and advisory firm Grant Thornton, the total number of merger and acquisition transaction in the first quarter of this year stood at USD 4.56 billion, down from USD 18.39 billion in the same period last year.
"The quarter clearly saw decline in deal activity, possibly driven by interplay of factors given the macro conditions as well as the pressure on liquidity," the Grant Thornton report said.
Commenting on the findings, Grant Thornton India Partner (Transaction Advisory Services) Raja Lahiri said, "Given the FDI regulatory changes in various sectors and Government's push to attract FDI, we believe that M&A deal activity should pick up this year".
Interestingly, excluding the internal mergers and restructuring, M&A deal values in the first quarter of this year were up 14 per cent as compared to first quarter of 2012.
In the first quarter of 2012, out of the total M&A value of USD 18.39 billion, merger and internal restructuring deals amounted to USD 14.43 billion.
Inbound deals were the flavour of the very first quarter of this year as the total value of inbound deals wherein foreign companies or their subsidiaries acquired Indian businesses was USD 2.90 billion (through 29 deals) compared to USD 1.26 billion (by way of 36 deals) in first quarter of 2012.
The total value of domestic deals in first quarter of 2013 was USD 1.41 billion (via 66 deals) as compared to USD 2.01 billion (71 deals) during the corresponding quarter in 2012.
The total value of outbound deals (Indian companies acquiring businesses outside India) in first quarter of 2013 was USD 0.19 billion (21 deals) compared to USD 0.69 billion (26 deals) during first quarter of 2012.
Pharma and healthcare space dominated both M&A activity in the quarter. Mylan Inc's acquisition of Agila Specialties (Strides's injectable business) for USD 1.8 billion was the top deal for the quarter, the report said.