M&A deals more than double to $3 bn in Jan

Merger and acquisition (M&A) activity in the country more than doubled in the first month of 2010 as deals worth nearly $3 billion (about Rs 13,950 crore) were announced amid improved signs of liquidity, a study said.

According to the monthly deal report of VCEdge, a financial research provider, the M&A deal value during January 2010 stood at $2.8 billion, a whopping 126 per cent rise over the same period last year.

In terms of deal count there was also an upward trend, as there were around 53 deals in the first month of the year, as compared to 32 deals witnessed during a year-ago period, the report added.

Domestic deals were in fervour during January 2010, as there were as many as 29 domestic deals worth $2,303 million as compared to 14 transactions worth $589 million in January 2009.

Meanwhile, the number of outbound deals more than doubled from 6 in January 2009 to 13 in January 2010. Besides, the average deals size also grew to $111.30 million in the first month of 2010 from $84.28 million, the report said.

A sector wise analysis shows that telecom, logistics and banking, finance and insurance were the most targeted sectors for investments with deals worth $2,180 million, $164 million and $117 million, respectively.

Together, these sectors accounted for more than 85 per cent of total private equity deal value during the month.

The largest deal was GTL Infrastructure's acquisition of the telecom tower assets of Aircel for Rs 400 crore through a Special Purpose Vehicle.

The deal makes GTL Infra the world's largest independent telecom tower firm and will give the company an additional 17,500 telecom towers taking its total portfolio to 32,500.

Besides, the GTL-Aircel deal, some of the other major M&A deals include -- Telenor's third and penultimate round of investment of $326 million in Unitech Wireless for 11.1 per cent stake and SHV Energy which acquired Chennai-based Caltex Gas India for $109 million from Chevron Corp.

The top 5 M&A deals accounted for more than 85 per cent of the total M&A deals in January 2010. In January 2009, top 5 deals accounted for more than 98 per cent of total value for the month, the report added.