M&As worth $4 bn in Apr; Jan-Apr deal tally at $12 bn

Following the significant rise in deal activity in April, M&A deal value for the first four months of the year amounted to $12.57 billion, registering a jump of 49% over the January-April 2015

Corporate India’s merger and acquisition activity witnessed a significant uptrend in April and touched $3.64 billion, over twofold jump over the corresponding period last year, says a report.

Following the significant rise in deal activity in April, M&A deal value for the first four months of the year amounted to $12.57 billion, registering a jump of 49 per cent over the January-April 2015.

The overall M&A market witnessed a significant upsurge this month with a $2 billion transaction and two deals worth over $100 million, Grant Thornton India said.

Domestic M&A deals saw a steep hike, predominantly on account of Ultratech Cement's $2.4 billion acquisition of Jaiprakash Associate's cement business. Moreover, domestic transactions doubled as compared to the corresponding period last year and cross-border deals also grew at a steady nine per cent.

“The key growth has come from the domestic M&A activity, which contributed $3.3 billion to deal values. Both inbound and outbound deal flow has been nominal this month,” Grant Thornton India LLP Partner Prashant Mehra said.

Growth in values, despite volumes remaining fairly stagnant, reflect a significant increase in high-value deals (above $100 million) with 26 such deals in M&A and PE, together contributing to more than 70 per cent of total deal values so far this year.

Outbound deal values grew about three times the value as compared to last year, while inbound deals have been muted during January-April, falling by about 24 per cent.

Sector-wise, manufacturing led the deal activity in April, contributing around 66 per cent of total deal value. The month witnessed its largest deal this year - Ultra Tech Cement’s acquisition of Jaiprakash Associates. In terms of number of deals, e-commerce, topped the deal table. With increasing consolidation in the E-commerce space, start ups attracted M&A deal volumes constituting 23 per cent of total deal volumes.

The month also witnessed some big ticket deals in sectors like telecom and IT&ITES, Grant Thornton said.