M&A activity expected to see sharp jump in 2013: Ernst & Young
Although global uncertainties and domestic factors impacted mergers and acquisitions (M&As) in India in 2012, they are expected to see a sharp jump in 2013, to be driven mainly by cross-border activity, global consultancy firm Ernst & Young has said.
"Deal activity declined by 8.1 per cent as global uncertainties and domestic factors left an impact on Indian M&A in 2012. However, the momentum temporarily picked up in 3Q12 and expected to continue in 2013," Ernst & Young said in its report on M&A here.
The third quarter of the year witnessed a strong surge in the M&A activity and may be an indicator of the return of the market's appetite for deal making. This momentum in M&A is expected to continue in 2013, it said.
India's hunt for natural resources is expected to continue in the coming year. The Indian government is in the process of expediting the acquisition of oil, gas and coal assets abroad.
Furthermore, several state-owned and private players have unveiled huge capex plans and readied war chests worth billions of dollars for potential asset buys, it said.
E&Y said the Indian M&A activity in 2012 has not lived up to expectations. Global economic headwinds, such as uncertainties pertaining to the Eurozone crisis, slow recovery in the US and moderate growth rates in emerging economies have weighed down M&A activity in India.
Domestic factors, such as high interest rates, depreciation of the rupee and slow GDP growth further exacerbated the situation till Q3'12. India's M&A deal value for 2012 reached USD 31.4
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