M&A activity up 69 % in first half of '10

During the first half of 2010, Indian companies were involved in 300 merger and acquisition (M&A) deals, 69 per cent more than the same period last year and up 27 per cent than in the second half of 2009.

The largest deal during the period was Bharti Airtel’s acquisition of Kuwait-based Zain’s African assets in a deal valued at $10.7 billion (Rs 50,076 crore).

This was followed by Adani Enterprises’ $5.48 billion (Rs 25,646 crore) amalgamation with Mundra Port and Abbott Healthcare’s $3.72 billion (Rs 17, 410 crore) acquisition of Piramal Healthcare’s domestic formulation business.

According to a study by Venture Intelligence, a Chennai-based research service on private equity and M&A activities in India, the deal value during the April-June quarter 2010 for 135 deals (which had announced transaction values) was estimated to be around $20 million (around Rs 92 crore), marginally down from the median deal value of $20.5 million (Rs 95.94 crore) during the same period last year but higher than the $17.75 million (Rs 83.07 crore) during the second quarter of 2009

About 33 per cent deals during the first quarter of 2010 were outbound acquisitions, as against only 23 per cent in the first quarter of 2009.

Domestic deals continued to be the major contributor with a 53 per cent share.

“The most preferred destination for Indian companies was the US, with 25 of the 99 outbound targets in located in that country, followed by the UK (with 23 deals). The acquires in 12 of the 42 inbound deals were US-based companies, followed by French companies with seven deals and Japanese companies with six deals”.

The IT & ITes and manufacturing industries accounted for the most number of acquisitions during the first quarter of 2010 with a share of 22 per cent each.

The activity in the manufacturing industry grew from 19 per cent during the same period last year while the share of IT & ITes deals marginally fell (from 23 per cent).
 

ACTION-PACKED TOP M&A DEALS
Target	Sector	Acquire	Type	Date	In $ mn
Zain Africa	Telecom	Bharti Airtel	Outbound	Feb ’10	10,700
Mundra Port & SEZ	Port	Adani Enterprises	Domestic	Apr ’10	5,480
Piramal Healthcare  Domestic Formulations Biz	Life  Sciences	Abbott Laboratories	Inbound	May ’10	3,720
Ferrous Resources  Brazilian Operations	Mining &  Minerals	NMDC	Outbound	Feb ’10	2,500
(Aircel)	Telecom	GTL Infrastructure	Domestic	Jan ’10	1,850
Source: Venture Intelligence M&A Deal Database