October 2011
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M&A drops 41.5% in nine months

Mergers and acquisitions (M&A) in India have slumped by 41.5 per cent to $26.8 billion during first nine months of 2011 as rising interest rates and uncertainties in the global economy dampened sentiments, a report showed Friday.


During January-September 2011 period, 177 mergers and acquisitions deals, valued at $26.8 billion, took place which is 16.9 per cent lower in volume and 41.5 per cent lower in terms of value when compared to the same period in 2010, according to data compiled by  mergermarket, an independent mergers and acquisitions intelligence firm.

Inbound deals accounted for 88.1 per cent of all Indian M&A activity, four times that of Indian investments overseas. Inbound deals stood at $7.32 billion in July-September quarter as compared to $2.65 billion in the previous quarter.    

The total deal value in the first nine months of 2011 was largely contributed by two inbound deals — British Petroleum’s $7.2 billion bid for Reliance Industries Limited and Vodafone Group’s purchase of 33 percent stake in Vodafone Essar for $5.46 billion.

Energy, mining and telecommunications sectors accounted for more that 50 per cent of the M&A deals in the country.

However, each of the sectors saw a sharp decline when compared to the corresponding period last year.

Energy and mining stood at $7.83 billion, a fall of 35.6 per cent, telecommunications sector saw a massive decline in both deal value and deal count, from 16 deals worth $19.56 billion in January-September 2010 to three deals worth $6.13 billion in January-September 2011 — a significant drop of 68.7 perc ent.


Source: Deccan Herald

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