M&As, private equity deals touch $8.2 bn: Thornton

In the first four months of 2006, India Inc has seen a flurry of mergers and acquisitions (M&A) and private equity (PE) deals. The total M&A deal value for the period has been at $8.2 billion while PE deal value has grown to $2.3 billion, according to a report by global consultancy firm Grant Thornton.

The report says the total number of cross border deals during the period stood at 77, valued at $5.6 billion. Inbound deals totalled to 25 valued at $2 billion as against a total of 52 outbound deals valued at $3.6 billion.

In the entire year of 2005, 192 cross-border deals were made valued at $9.5 billion. The number of acquisitions made by Indian companies abroad stood at 136, which was more than double the number of acquisitions made by international companies in India, which stood at 56. This gives a clear indication that Indian companies are expanding their presence globally.

As compared with 2005, the gap between the average deal size for inbound and outbound deals have marginally reduced. The average deal size for inbound deals was $80 million (in 2005 this average was $92 million) and for outbound deals it was $69 million ($32 million in 2005).

The largest proportions of outbound acquisitions were made in Europe contributing to 52 per cent of all outbound deal value followed by South America (Brazil) which contributed to 39 per cent. USA's proportion of the outbound acquisition value from India was only 4 per cent as compared with 16 per cent in the previous year.

The report added that the first four months of the year 2006 has seen Indian pharmaceutical companies making big acquisitions in the European market, led by Ranbaxy Laboratories which has made three acquisitions within a short span of time.

In the inbound acquisition space, North American companies contributed around 43 per cent of the total deal value, followed by Asia Pacific at 30 per cent and Europe at 27 per cent of the deal value.

The first four months of the year continue to see large number of MNCs entering into the Indian market through the acquisition route and tapping the IT & ITeS segments Topping is the list is RR Donnelley & Sons investment of OfficeTiger for $250 million.