M&A hits six-year low in first-half of 2015

First half of the year worth $14.1 billion transactions, lowest since $9.1 billion in 2009

Mergers & Acquisitions hit a six year low at $ 14.1 billion worth of transactions in the first six months of this year, said a report from financial services firm Thomson Reuters. This is about 25% lower than corresponding period of the previous year and lowest first-half since 2009 when it was reported $ 9.1 billion following the bankruptcy of Lehman Brothers.

The average M&A deal size for transactions with disclosed values dropped to US$ 62.5 million in the first half of 2015 against $ 83.3 in the corresponding period of the previous year. Cairn India’s merger with parent Vedanta Ltd is the biggest transaction of this year at the value of $ 2.15 billion

“Domestic M&A stood at US$ 4.7 billion, down 42.9% over a year ago, and saw the lowest first half period since 2013 when deal value dropped to US$ 2.5 billion,” said the report.

Total cross-border M&A saw a minimal increase of 9.6% to $ 8.0 billion compared to the first half of 2014. “Outbound M&A activity declined 43.3% from the comparative period last year,” said the report.

But the inbound M&A activity increased by 23.4% from the first half of 2014 with the US companies being the biggest buyer of assets in India.  

“United States is currently the top acquirer of Indian companies in terms of value and number of deals with $ 2.9 billion from 60 announced deals, and accounted for 40.5% of India’s inbound M&A activity,” said the report. United Kingdom and Singapore trailed behind and accounted for 37.7 and 6.7% market share, respectively.

In terms of the contribution of sectors in the deals,  The Industrials sector accounted for majority of the acquisitions involving Indian companies with 22.8% market share worth $ 3.2 billion, up 66.9% in deal value compared to the first half of 2014, making it the highest first half period for the sector since 2011 ($ 5.6 billion).  Energy & Power followed closely behind with 22.3% market share as deal value increased to$ 3.1 billion, up 40.8 from the same period last year.

Health care industry, which accounted for majority of the activities during the first half of last year, slipped to fourth place and captured 10.6 of the market share with $ 1.5 billion worth of deals, down 67.9 over a year ago.

TOP 5 DEALS
Month	Target	Acquirer	Value ($ million)
June	Cairn India	Vedanta Ltd	2156
January	Senvion SE	Centerbridge Partners	1193
May	Madura Fashion & Lifestyle	Pantaloons Fashion and Retail	817
February	Famy Care Ltd- Cert Female	Mylan Laboratories	800
February	Suzlong Energy	Investors Group	457
Source: Thomson Reuters