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Indian M&A activity slumps 83% to $2.9 billion in Jan-Mar: Report

M&A activity in the Asia-Pacific region as a whole dropped to $72.9 billion, a decline of 26.1%

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Merger and acquisition activity in the declined 26.1% in the first quarter of this year and the drop was even sharper in where the deal activity declined over 83% amid concerns regarding the country's economy, says a report.

According to a report by global deal tracking firm mergermarket, M&A activity in the Asia-Pacific region as a whole dropped to $72.9 billion, a decline of 26.1% by value from first quarter of 2012 ($98.6 billion).

Deal activity in India slumped to $2.9 billion the January-March quarter, down 83.1% from the corresponding quarter a year ago when transactions worth $17.2 billion were announced, underscoring the weight of concerns regarding the country's economy, mergermarket said.

In terms of number of deals, a total of 55 deals were announced in India the reported quarter, far less than the 77 in the year-ago period. Deal count in the Asia-Pacific region in the first quarter of this year also fell to 560 from 590 in the corresponding period previous year.

Inbound M&A activity by value fell for the second straight quarter to $2.2 billion. A total of 30 targets were snapped up by foreign buyers, the smallest number since the fourth quarter of 2011 (27 deals).

In a similar tandem, Indian buyers were remarkably reticent in acquiring overseas targets this quarter, the report said.

Outbound deals totalled $0.6 billion, the weakest performance since third quarter of 2010 ($0.6 billion). The deal count also fell to nine, the lowest since third quarter of 2009 (eight deals).

Despite the sluggish deal market, M&A deal value in the pharma, medical & biotech space more than tripled from first quarter of 2012 ($0.4 billion), making it the biggest contributor to Indian M&A by value this quarter.

"It was one of the few silver linings in what has been a very sluggish quarter for M&A in India," mergermarket said.

In a sharp contrast, M&A in the bellwether energy, mining & utilities sector dropped to $0.4 billion this quarter, a staggering 96.3% dip from the year-ago period ($10.5 billion).

Mylan's offer for two of Strides Arcolab's subsidiaries was the largest deal this quarter and, at $1.6 billion, accounted for 55.1% of the aggregate deal value in India, the report said.

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