Merger and acquisition (M&A) activities involving Indian companies have slumped to a three-year low of $19.9 billion so far in 2009, with the corporate world facing a liquidity crunch in the wake of the global financial crisis.
"India-targeted M&A activity reached $19.9 billion via 484 deals this year to date, down 33 per cent on the same period last year, making it the lowest year to date level since 2006," global deal-tracking firm Dealogic said.
There had been M&A deals worth about $29.70 billion in the corresponding period in 2008.
Out of $19.9-billion M&A deals involving Indian firms, inbound deals amounted to $12.3 billion where foreign firms bought stake in Indian companies.
Inbound cross border M&A has fallen 27 per cent to $12.3 billion via 103 deals, the report said, adding outbound M&A activity fell marginally to $13.9 billion through 54 deals, a 0.40 per cent fall from the same period last year.
"Inbound cross border M&A volume would have dropped more significantly had it not been for MTN Group's $9.5 billion acquisition of a 7.7 per cent stake in Bharti Airtel, the second largest India inbound deal on record," Dealogic added.
The Bharti-MTN deal with a potential value of $23 billion is the largest M&A deal in the telecommunications sector in 2009 YTD.
Besides, the valuations of outbound deals too were propelled by Bharti Airtel's $13.2 billion acquisition of a further 36 per cent stake in MTN Group to increase its holding to 49 per cent.
The telecom sector was the most active segment this year as the sector alone witnessed deals worth $10.3 billion, followed by oil &gas ($2.1 billion), Construction ($2 billion), Technology ($1 billion) and finance ($0.80 billion).
In terms of the number of deals, however, finance was at the top with about 65 M&A deals till date in 2009, followed by technology (52) and construction (37).
