Mergers and acquisitions (M&As) in India increased nearly 3% in the first nine months of 2017– the highest in terms of deal value since 2010. The deal value had stood at $57.1 billion in the first nine months of 2010. The value of announced M&A deals involving Indian companies reached $43.2 billion in the first nine months of 2017, up 2.6% compared with the same period last year, as the number of announced deals increased 10.1%, according to a Reuters review of the first nine months of M&A in 2017.
Total cross-border M&As stood at $26.6 billion, up 27.4% in value compared to the first nine months of 2016. Inbound M&A activity hit a decade high of $24.5 billion, up 61.6% from the year-ago period. However, outbound M&A activity slowed down 62.5% to $2.2 billion from the comparable period last year, the lowest first nine-month period since 2014.
Domestic M&As stood at $15.3 billion, down 23.9% in value from a year ago, despite a 17.8% year-on-year increase in the number of announced domestic deals. Completed M&A deals involving Indian companies totalled $41.3 billion, a 67.5% increase in deal value compared with $24.6 billion for the first nine months of 2016. The number of completed deals grew 20.6%.
However, despite the $11.6-billion Idea-Vodafone merger, the average M&A deal size for transactions with disclosed value declined to $78.9 million during the first nine months of 2017 (compared with $91.7 million over the same period in 2016), as more mid-market M&A deals were announced this year.
The telecommunications sector accounted for a majority of acquisitions involving Indian companies with a 36.2% market share worth $15.6 billion, a 115.1% increase in deal value compared to the first nine months of 2016, making it the highest first nine month period for the sector since 2007 ($18.3 billion).
The pending Vodafone-Idea merger is currently the largest India M&A deal so far in 2017 and the second-largest-ever telecommunication deal involving India after the $12.7-billion Hutchison Essar-Vodafone Group deal in 2007.
High technology and financials rounded out the top three industries and captured 14.8% and 9.6% market share, respectively, the review shows.
Companies from the UK is currently the top acquirer of Indian companies in terms of value with $11.6 billion from 13 announced deals and accounting for 47.6% of India’s inbound M&A activity.
The US is placed second and witnessed the most number of inbound acquisitions with 99 announced deals worth $4.3 billion, up 107.3% in value, and captured 17.5% market share. Singapore took the third place with a 12.7% market share worth $3.1 billion, up 120.7% in deal value from over a year ago.
Meanwhile, private equity-backed M&As in India saw a minimal increase in 2017 year-to-date. Buyside financial sponsor M&A activity targeting Indian companies totalled $4.3 billion during the first nine months of 2017, a 0.3% minimal increase in deal value, almost unchanged compared to the first nine months of 2016, but the number of deals declined 3.4%.