Mergers and acquisitions deal value falls 87% in May: Report

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Mumbai | Published: June 22, 2019 2:26:04 AM

Mergers and acquisitions (M&A) activity remained subdued in May this year with deal value falling 87% and deal volume falling 27% compared to a year ago, according to the dealtracker report by Grant Thornton.

Energy sector saw a surge in M&A deal values with India Grid’s acquisition of Sterlite Power Transmission falling in the billion-dollar category.

Mergers and acquisitions (M&A) activity remained subdued in May this year with deal value falling 87% and deal volume falling 27% compared to a year ago, according to the dealtracker report by Grant Thornton.

Weakness in the rupee against the US dollar, spike in international crude oil prices amid uncertainties on whether the US will end sanctions on Iranian oil imports and the indecisiveness amongst investors until the results of the general elections led to the subdued deal activity, the report indicated.

The month recorded one deal in the “billion-dollar” category and three deals valued and estimated over $100 million each together capturing 90% of deal values.

Domestic and cross-border transactions failed to record M&A deals as compared to May 2018 owing to which the month fell short of witnessing marquee deals. This in turn added to the continuing weak performance of the year-to-date (YTD) deal activity both in terms of deal value and volume.

Energy sector saw a surge in M&A deal values with India Grid’s acquisition of Sterlite Power Transmission falling in the billion-dollar category. The sector and the deal alone captured 49% of total M&A deal values, Grant Thornton indicated.

Despite dominating the M&A deal volumes with 21% (7 deals), the start-up sector recorded the lowest Y-o-Y volume since 2015, the report said. “However, consolidation will be on the rise given the market dynamics and the formation of the new government. It can also be witnessed with Quikr’s 15th acquisition since its inception in 2008 and its first in the pre-owned goods vertical, QuikrBazaar. The start-up has invested around $250 million in acquiring these 15 companies,” the report pointed out.

Pankaj Chopda, director at, Grant Thornton India, said he expects increased activity in the coming months with the new government in place. “We are also optimistic of witnessing big-ticket deals in the coming months considering the pipeline which includes JSW Steel- Asian Colour, Jaypee Infratech- NBCC, Snapdeal- Shopclues, among others,” he said.

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