Value of M&As involving Indian firms falls to $2.6 bn in Apr-Jun

The value of mergers and acquisitions involving Indian entities plunged over 80 per cent to $2.59 billion in the June quarter compared to the previous three months, says a report.

“Indian M&A activity continues to remain sluggish,” global advisory firm mergermarket has said.

The value of M&A deals involving Indian companies stood at $16.59 billion in the first three months of 2012.

According to mergermarket, 2012 second quarter also represents the second-worst M&A performance in India in terms of deal value since the third quarter of 2008.

“More significantly, the number of deals shrank from 136 in the first half of 2011 to 121 in the first half of this year,” it noted.

According to mergermarket, all these figures underscore the “increasingly uncertain deal-making climate prevailing in India at the moment”.

Among other criteria, mergermarket said the figures are based on announced transactions that were over $5 million. Transactions with undisclosed deal values have been included where the target's turnover exceeds $10 million.

The report noted that cross-border M&A remained disappointing since there were only $5.3 billion worth inbound deals in the first half of 2012.

“Outbound activity stood at $1.96 billion, also the worst total since the first half of 2009 which saw a paltry $0.79 billion of acquisitions by Indian bidders overseas,” it added.

Going by the report, energy, mining & utilities commanded 55.3 per cent of total M&A value in the 2012 first half, almost entirely due to the restructuring of Vedanta Resources.

The merger of Sesa Goa and Sterlite, part of Vedanta group, was worth about $10.2 billion.

“The sheer size of the Sesa Goa-Sterlite merger, which represented 53.7 per cent of all M&A value in the first half of 2012, meant that it was crucial in determining the rankings of financial and legal advisers.

“Morgan Stanley retained top spot in the financial adviser league tables with seven deals worth $12.1 billion. Ernst & Young topped the financial advisers rankings in terms of volume, having advised on nine transactions this year,” mergermarket said.