Information technology, financial and realty sectors cornered nearly 52% share of the 68 merger and acquisitions (M&A) deals during June and July, according to the Assocham Financial Pulse study.
M&A activity is likely to pick up worldwide in 2011 due to the desire of companies to invest the cash hoarded during the recession, Assocham Secretary General DS Rawat said here.
International deals were the biggest contributor to M&A activity in the past two months with a share of 54.4%. This was followed by domestic market which has a share of 20.6%, the Associated Chambers of Commerce and Industry of India (Assocham) said.
The share of inbound deals - percentage of foreign companies that acquired Indian firms - comprised only 7.4% of the total activity.
The IT sector witnessed maximum buoyancy in M&A activity with a total of 18 deals finalised - one inbound, two domestic, three outbound and 12 international.
"This shows Indian companies are trying to gain entry into new markets besides increasing the product and services portfolio," Rawat said.
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Outbound and international deals formed a major share of M&A activity in the IT sector during June. July was characterised by a large number of international acquisitions, but the Indian market did not see much of activity.
The key deals included acquisitions of Median AG by Lenovo, Echosign by Adobe and Gen-i Software Solutions by Indian IT major Infosys.
In the real estate sector, said the Assocham study, five international deals happened in the United States. There was one case of Indian company acquiring a foreign company and one of Indian company acquiring another Indian company.
Seven M&A deals took place in banking, financial service and insurance sector with EXL service holdings acquiring Outsource Partners, Northern Trust acquiring Band of Ireland Securities Services and IDBI acquiring Universal Commodity Exchange.
In June, all deals were of international nature, while July witnessed an outbound deal in which Religare Enterprises acquired Noah to improve its share in South African market.
The key acquisitions in telecom sector included Vodafone acquiring 22% stake in Essar Communications for $3.32 billion and ICICI acquiring a stake in GTL.
Other M&As involving Indian majors included Mundra Port acquisition of Abbot Point Coal for $1.8 billion, Jindal Steel and Power (Australia) increasing stake in Rocklands Richfields from 14.46% to 27.29%, Aditya Birla Group acquiring Columbian Chemicals and Godrej's acquisition of Darling Group Holdings for entry in South African fast moving consumer goods market.
In India, economic reforms have opened up a whole lot of challenges, both in the domestic and international spheres. The increased competition in the global market has prompted the Indian companies to go for M&As as an important strategic choice. This process is being extensively used for restructuring the business organisations.
In the past, the corporate restructuring through M&As has tremendously increased and further likely to grow at a much larger rate worldwide in the years to come, Rawat said.