It’s a total rockfest on dealstreet. For the first 10 months of the year, the total value of mergers & acquisition (M&A) and private equity(PE) deals involving India Inc has more than doubled to a staggering $63.5 billion compared to $30.3 billion in the same period last year. While the billion-dollar strategic M&A deals hogged the limelight in the early part of this year, PE investments are leading the way in the second half.
For instance, the total value of PE deals between January and October has shot up to $13.62 billion against $5.93 billion in the corresponding period last year, according to the latest dealtracker by advisory firm Grant Thornton.
During the period, the volume of PE deals increased by 32% to 380 deals. This means that the average size of PE deals this year also increased from $26 million to $40 million.
There was a similar increase in size of the average M&A deal which was expected given the multi-billion deals of Tata-Corus, Vodafone-Hutch, among others. While volume of strategic M&A deals rose 53% to 582 in the first 10 months of 2007, the average size of M&A deals increased from $64 million to $85 million this year.
The total number of M&A deals announced during October 2007 stood at 51 with an announced value of $610 million against 71 deals worth $840 million in September. The most significant deals during the month were L&T’s acquisition of Tamco Switchgear, Holcim’s increasing stake in Ambuja Cements and Ranbaxy Labs’ acquisition of 38.00% stake in Zenotech Laboratories.
As in the past, cross-border deals led the show in M&As. In total there were 17 domestic deals where both the acquirer and target were Indian companies, with an announced value of $70 million and 34 cross-border deals worth $540 million.
Out of these, 20 cross-border deals were outbound deals (Indian companies acquiring businesses outside India) and the rest were inbound deals where multinationals acquired equity stake in Indian companies. The value of inbound and outbound M&A deals stood at $270 million each.
October was also a big month for PE funds who struck 43 deals with an announced value of $1.81 billion against 29 deals worth $990 million during the previous month.Some of the prominent PE deals last month included Warburg Pincus picking a minority stake in Havells for $110 million, Global Infrastructure Partners & Zeus acquiring 74% in East India Petroleum, 3i picking a minority equity stake in Adani Power for $227 million, IDFC Private Equity led consortium investing $100 million in Moser Baer Photo Voltaic, Citigroup Property Investors investing $250 million in Nitesh Estates and a consortium involving GIC, T Rowe Price, ICICI Bank and IDFC investing $120 million in Mundra Port & SEZ through a pre IPO deal.
Source: Economic Times