April witnesses 96% fall in M&A deal values: Report

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Published: May 23, 2019 4:41:53 PM

Grant Thornton India director Pankaj Chopda said considering May being the month of election results, the uncertainty in deal landscape is expected to fade away soon.

This was driven by various government reforms to boost
sector attraction.

The month of April witnessed a 96% fall in merger and acquisition (M&A) deal values compared with April 2018 despite conducive factors such as easing of Indo-Pakistan tensions, strengthening rupee and easing inflation, a dealtracker report by Grant Thornton said.

The month recorded only 35 deals aggregating to $0.7 billion. “Driven by Amazon’s strategic stake acquisition in Witzig Advisory Services in order to acquire Aditya Birla’s More and comply with the latest FDI norms on e-commerce, the retail and consumer sector led the deal value with 43% of the total M&A values,” the report said.

Compared with March 2019, April witnessed a significant drop in the deal values by 92% despite a healthy 17% increase in the deal volumes. This fall can be attributed to the drop in big-ticket transactions — April saw only three deals valued at over $100 million each compared with eight such transactions, which also included one deal valued over $7 billion, recorded in the previous month, the report indicated.

The year 2019 so far has witnessed a significant drop in M&A deal activity with 65% fall in deal values compared with the same period in 2018. Manufacturing, pharma, IT and e-commerce sectors led the M&A deal values in year-to-date (YTD) 2019. This was driven by various government reforms to boost
sector attraction.

Grant Thornton India director Pankaj Chopda said considering May being the month of election results, the uncertainty in deal landscape is expected to fade away soon. “However, transactions to pare debt, closure of IBC-related transactions and transactions in the pipeline indicate a silver lining for the rest of the year,” he said.

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