India-targeted M&A volume touch $19.9 bn; lowest in 3 years

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New Delhi: Merger and acquisition activities involving Indian companies have slumped to a three-year low of $19.9 billion so far in 2009, with the corporate world facing a liquidity crunch in the wake of the global financial crisis.

“India-targeted M&A activity reached $19.9 bn via 484 deals this year to date, down 33% on the same period last year, making it the lowest year to date level since 2006,” global deal-tracking firm Dealogic said.

There had been M&A deals worth about $29.70 billion in the corresponding period in 2008.

Out of $19.9-billion M&A deals involving Indian firms, inbound deals amounted to $12.3 billion where foreign firms bought stake in Indian companies.

Inbound cross border M&A has fallen 27% to $12.3 billion via 103 deals, the report said, adding outbound M&A activity fell marginally to $13.9 billion through 54 deals, a 0.40% fall from the same period last year.

“Inbound cross border M&A volume would have dropped more significantly had it not been for MTN Group’s $9.5 billion acquisition of a 7.7% stake in Bharti Airtel, the second largest India inbound deal on record,” Dealogic said.

The Bharti-MTN deal with a potential value of $23 billion is the largest M&A deal in the telecommunications sector in 2009 YTD.

Besides, the valuations of outbound deals too were propelled by Bharti Airtel’s $13.2 billion acquisition of a further 36% stake in MTN Group to increase its holding to 49%.

The telecom sector was the most active segment this year as the sector alone witnessed deals worth $10.3 billion, followed by oil &gas ($2.1 billion), Construction ($2 billion), Technology (1 billion) and finance (0.80 billion).