India-focused merger and acquisition activity has started 2010 with a bang as deals worth $3 billion (around Rs 13,850 crore) has been announced so far this year, the highest year-to-date volume on record, says a report by global deal tracking firm Dealogic.
"India targeted M&A volume reached $3 billion via 73 deals so far this year, up 24 per cent from the same period in 2009, making it the highest year-to-date volume on record " the report said.
India-targeted M&A accounted for over 12 per cent of Asia (excluding Japan) M&A volume so far this year, down five percentage points on last year, Dealogic added.
The high M&A volume so far this year was mainly driven by GTL Infrastructure's $1.8 billion acquisition of Aircel Ltd's telecom tower operations, which was the fourth largest telecom deal globally so far this year and also the fourth biggest India-targeted telecom deal on record.
Inbound cross-border transaction accounted for just 7 per cent of the total year-to-date deal volume, while the same accounted for 20 per cent of the total deal volume in the same period last year.
Life Insurance Corporation buying 1.6 per cent stake in Reliance Industries for $574 million was the second largest deal in India.
Some other top M&A deals include — Raghuleela Lessors & Developers' $125 million property acquisition at Ghatkopar, Mumbai, Bain Capital Partners' 35.4 per cent stake buy in Himadri Chemicals & Industries for $124 million and India Infoline's 22.3 per cent stake acquisition in India Infoline Investment Services for $72 million, Dealogic added.
Experts believe, 2010 would continue to see a slew of M&A transactions as corporates take advantage of the new opportunities, slowly improving liquidity situation worldwide and the fact that the United States and Europe may witness further consolidation.
In the year 2009, India Inc announced deals worth $10 billion, and domestic deals accounted for a large chunk around 60 per cent. The theme of M&A space changed in 2009 from 'aggression and optimism' to 'distress sale and desperation' — thus leading to less intense deal activity.
According to global consultancy major Grant Thornton, a total of 267 M&A deals were announced during 2009, for a total value of $10.03 billion, as against 454 deals worth $30.95 billion in 2008 and 676 deals totalling USD 51.11 billion in 2007.
