Corporate India's Jan-Sept M&A deal tally touches $76.03 billion: Report

Corporate India announced merger and acquisitions (M&As) worth $ 11.5 billion in the third quarter of this year, following which the January-September deal tally stood at $ 76.03 billion, says a report.

"Strong earnings, promising demographics and big ticket deals drove the M&A activity, clocking deals worth $ 76 billion from over 350 transactions," said Prashant Mehra, Partner Grant Thornton India LLP.

Moreover, large deals such as Walmart's acquisition of Flipkart, merger of Bharti Infratel and Indus Towers, ONGC's acquisition of HPCL, UPL's acquisition of Arysta LifeScience and some other large deals in this space resulted in a two fold jump in deal activity compared to the same period in 2017, Mehra added.

According to the report, there were 130 M&A deals worth $ 11.5 billion in the third quarter of the current year, registering a five fold jump over last year, when transactions worth $ 2.14 billion were announced through 119 transactions.
 

The significant uptrend in the third quarter deal activity was driven by outbound activity, which was a result of domestic companies trying to establish presence in the international markets coupled with domestic consolidation, the report said.

Moreover, the July-September quarter recorded two deals in the billion dollar club and 12 deals estimated and valued at and above $ 100 million each together capturing 89 per cent of total M&A values.

A sector-wise analysis showed that, the agriculture sector led the deal activity in the third quarter of this year, accounting for 37 per cent of the total deal value, driven by UPL Ltd's acquisition of Arysta LifeScience Inc for $ 4.2 billion.

The pharma sector remained active during the July-September quarter, recording eight deals worth $ 1.3 billion, with Aurobindo Pharma's acquisition of the dermatology business and generic US oral solids portfolio of Sandoz Inc.

It was followed by Constellation Alpha Capital Corp's acquisition of Medall Healthcare for $ 212 million, marking the largest investment in an Indian diagnostics company till date, the report said.
 

The start-up sector meanwhile, led in terms of deal volumes, capturing a 22 per cent share as a result of revived domestic investors' interest in the FinTech segment followed by travel and on-demand services platform.

Going ahead, "with the insolvency regime being the main catalyst, we expect an increase in restructuring activities, apart from also experiencing a new renaissance in the M&A and the restructuring horizon," Mehra said.

However, in the run-up to the elections, we could expect investors and corporates to adopt a more cautious approach over the course of the coming months, he added.