April M&A tally at $4.4 bn

Foreign companies and their subsidiaries continued to remain bullish on Indian businesses, as inbound transactions worth $2.28 billion were announced in the month of April, taking the total M&A deal value to a whopping $4.4 billion (around Rs 19,800 crore).

According to global consultancy firm Grant Thornton, as many as 64 M&A deals worth $4.4 billion were announced in the month of April.

Out of the total $4.4 billion, the total value of outbound deals wherein Indian companies acquired businesses outside India in April was $1.91 billion through 21 deals and the total value of inbound deals was $2.28 billion (17 deals), the report added.

"We are seeing a flood of cross border deals in the market and they comprise almost 95% of the total value of M&A deals for April and 88% for the period January to April, 2011. Inbound deals have picked up significantly over outbound," Harish HV, Partner, India Leadership Team at Grant Thornton India said.

The fears of global recession have gone and corporates are back to looking for deals on a global platform, he added.

Domestic transactions have taken a back seat, as the total value of domestic deals in April this year was $0.21 billion via 26 deals as compared to $1.03 billion through 60 deals.

A sector-wise analysis shows that oil and gas was the most targeted sector accounting for 43% of the total deal value driven by Vedanta's 11% stake acquisition in Cairn India from Petronas for $1.5 billion.

The other major deals include Genpact's acquisition of Headstrong Corporation for $550 million, Essar Energy's acquisition of Royal Dutch Shell's Stanlow refinery in northwest England for $350 million and the Aditya Birla-Domsjo Fabriker buyout for $340 million.

The top five M&A deals accounted for 69 per cent of the total M&A deal values, Grant Thornton said.

In the private equity segment, the deal values in the month of April amounted to $0.73 billion through (38 deals) as compared to $0.83 billion via 35 deals in the corresponding month last year.

"Private equity is growing in a steady manner and has touched a 3-year high of $2.6 billion with an increase in deal numbers. PEs are looking at spreading themselves quite well by increasing number of transactions and hence average deal sizes have come down," Harish said.