Merger and acquisition (M&A) activities in India has seen a sharp fall in 2012. M&A's during the first nine months of current year fell by 24% compared to last year's corresponding period, data from Thomson Reuters' India show.
M&A deals in the country stood at $ 26.4 billion in 2012 so far. The research further said that the average M&A deal size for disclosed deals declined to $74.5 million year-to-date, as compared to $ 85.6 million in the same period last year. This was mainly as majority of India’s M&A transactions fell below $1 billion mark.
Among the BRIC nations, China managed to corner 31.4% market share with $17.9 billion worth of deals from 475 announced M&As.
M&A advisory fees for bankers and consultants in India fell by 66%. According to estimates from Thomson Reuters/ Freeman Consulting Co., M&A advisory fees from completed transactions involving Indian companies totaled to $152.3 million in 2012 so far. Lazard took the top spot on M&A fee rankings for advisory work in deals involving Indian companies this year with $12.2 million and overtaking Morgan Stanley which lead the fee rankings in the same period last year. Morgan Stanley's estimated advisory fees stood at $7.5 million, a 72% decline from the comparative period last year, and the advisory firm also lost 1.2 market share.
The United States accounted for 40.9% of India’s outbound activity this year with $1.6 billion, which was an 18% increase in deal value from the first nine months of 2011. The Piramal Healthcare’s acquisition of Decision Resources Group, a Burlington-based provider of research, advisory and consulting services, from Providence Equity Partners, for an estimated value of $635 million was this year’s top outbound deal.
The data also shows that domestic M&A activities picked up during the year. Domestic deals stood at $9.7 billion, up 50.9% compared to the first nine months of 2011, the highest year-to-date volume since 2010 -- recorded as $10.9 billion.
Bulk of domestic activity focused on financial sector (23%) with $2.2 billion worth of deals closing. This is 18% rise in deals in 2012 so dar from the first nine months of 2011. Domestic acquisitions in the materials sector reached $1.9 billion, more than doubled from the same period last year.
Total cross-border deals amounted to $14.9 billion, down 45.8% from the first nine months of 2011. Inbound BRIC M&A activity announced 1,302 deals worth $57.1 billion, where India accounted for 19.4% ($11.1 billion) losing 1.8 market share points compared to the same period last year.
Materials Account for 31.5%. Year to date the materials sector dominated industry breakdown accounting for 31.5% of Indian-involved acquisitions worth $8.3 billion, up 36.2% from the first nine months of 2011.
This was driven by the merger of Sesa Goa Ltd, a 55.1%-owned unit of Vedanta Resources, with Sterlite Industries (India) in a deal valued at US$3.9 billion, the largest M&A transaction involving India this year. Concurrently, as part of Vedanta’s restructuring move, Vedanta Aluminum and Madras Aluminum will be consolidated into the new merged entity called Sesa Sterlite.
Private Equity-backed M&A targeting Indian companies slowed down during the first nine months of 2012 with 103 announced deals valued at US$3.3 billion. This is 30.4% fall from last year.