India Inc's M&A deal value drops 70% in H1'09

Slowdown in global economy has cast its shadow on the country's deal street as the number of merger and acquisitions (M&A) by India Inc declined by as much as 70 per cent to $5 billion.

The total number of M&A deals announced during the first half of 2009 stood at $4.93 billion compared to $16.09 billion in the corresponding year-ago period, according to a report by global consultancy major Grant Thornton.

Besides, the number of M&A deals announced during H1 2009 stood at 123, against 269 deals in the year-ago period.

"Due to the effects of the financial crisis as well as global recession and subsequent slowdown in the Indian economy, M&A in private equity investments in India have also seen a decline in activity," Grant Thornton said.

Oil and gas sector and telecom services attracted the maximum deals during the period, led by the $1.89 billion merger of Reliance Industries and Reliance Petroleum.

Domestic deals have outnumbered cross border ones in terms of value break up. Domestic deals accounted for $3.5 billion, whereas cross border deals were $1.41 billion.

"Deals values have been significantly impacted due to the lack of cross border deals," it added.

The biggest M&A deal in the H12009 was the RIL-RPL merger, followed by merger of Quippo Telecom and Wireless Tata Telecom Infrastructure for $533 million.