Adopting a wait-and-watch approach towards big-ticket acquisitions amid the slowdown, M&A deal value has more than halved to USD 6.2 billion during the September quarter from USD 13.7 billion in the year-ago period, says a report.
However, volume rose to 252 deals from 234 deals in the same period year-ago, according to an EY report.
"In the last few months, a sense of caution has prevailed amongst investors and businesses. Companies essentially are on a wait-and-watch in pursuing big-ticket acquisitions," EY partner and national leader for transaction advisory services Amit Khandelwal said today.
"But the market witnessed healthy activity in smaller value deals. Consequently, the quarter witnessed a fair increase in deal volume while deal value came down," he added.
According to the report, the domestic deal activity remained stable in terms of volume, indicating that the local market remained the preferred destination for businesses.
"Local M&A landscape was largely characterised by small-ticket deals essentially aimed to expand market share and most of such deals were witnessed in retail and consumer products, professional services, technology and media and entertainment sectors," EY said.
"Online players were popular targets across these deals, reflecting the companies thrust for digital transformation," it added.
Meanwhile, cross-border M&A activity remained muted during the quarter with total deal value declining 80.5 per cent year-on-year, primarily led by lesser big-ticket inbound investments.
During the quarter, inbound deal value came down to USD 441 million from USD 3.6 billion, while steady increase (6.4 per cent) in inbound volume showed investors' continuous focus on opportunistic acquisitions, the report said.
"Outbound activity remained almost flat in terms of both volume and value (39 deals totaling to USD 304 million)," it added.
Sector-wise, technology led the deal activity, both in terms of value and volume with 33 deals totaling to USD 3.8 billion, followed by financial services, recording 32 deals with a disclosed value of USD 291 million.
Another sector which has been continuously evolving is professional services, wherein companies were seen making acquisitions for expansion.
These acquisition also allowed them to explore new age digital channels to build capabilities in a disruptive environment, the report noted.
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