India Inc M&A activity shrinks to 2-year low, Thomson Reuters report shows

Mergers & acquisitions (M&A) activity in India has fallen to a two-year low, according to a Thomson Reuters M&A report.

By: | Mumbai | Updated: January 6, 2016 1:26 AM

Mergers & acquisitions (M&A) activity in India has fallen to a two-year low, according to a Thomson Reuters M&A report. The value of M&A deals involving Indian companies stood at $35.1 billion in 2015, a 4.8% fall compared to 2014.

Even the average M&A deal size witnessed a drop during CY15. The average transaction size of M&A deals during 2015 was  $70 million — compared with $77.6 million during 2014. In 2015, there were only four M&A deals involving Indian companies which were worth more than $1 billion compared to six deals in 2014. 2015 domestic M&A stood at $9.7 billion, down 46.4% compared to 2014 and the lowest since 2013 when deal value dropped to $5.1 billion  The industrials sector accounted for 15.9% of India’s domestic M&A activity while Energy & Power, Financials and Retail sector accounted for 12.3%, 11.7% and 11.6% of India’s domestic M&A activity, respectively.

Total cross-border M&A increased 73.1% to $23.2 billion compared to 2014. Outbound M&A activity grew 112.3% in value from the comparative period last year. Inbound M&A activity increased by 63.8% from the same period in 2014.

Data also showed Indian private equity-backed M&As in India went up by 129% in 2015, which was the highest since 2007. Buy-side Financial Sponsor M&A activity targeting Indian companies totalled $6.8 billion in 2015, a 129% increase in deal value compared to last year. This is the highest annual period since 2007 when deal value reached $6.9 billion. Private equity-backed M&As in India’s high technology sector accounted for 32.7% of the market share with $2.2 billion worth of transactions.

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