M&As at 6-year low in first half

This is about 25% lower than the corresponding period of the previous year

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

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

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

Total cross-border M&A saw an increase of 9.6 per cent to $8 billion from the first half of 2014. "Outbound M&A activity declined 43.3 per cent from the comparative period last year," said the report. But inbound M&A activity increased by 23.4 per cent from the first half of 2014 with companies from the US being the biggest buyer of assets in India.

"The US 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 per cent of India's inbound M&A activity," said the report. The UK and Singapore accounted for 37.7 and 6.7 per cent market share, respectively.

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

The healthcare industry, which accounted for the majority of the activity 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.