Jan sees 3-fold rise in M&As amid increasing consolidation

Merger and acquisition activity in the country started the year on a bullish note with deals of around $2.3 billion being signed in January — a nearly three-fold jump over the year-ago period.

According to assurance, tax and advisory firm Grant Thornton, there were 45 M&A deals worth $2,364 million in January this year. In January 2016, there were 42 such transactions amounting to $827 million.

The rise in both deal value and volume was primarily on the back of big ticket consolidation in the domestic deal activity that led to a four-fold increase in deal values compared to January 2015.

Going forward, the deal value is expected to stay positive.

"With the visibility on GST and demonetisation effect behind us, combined with the pragmatic Budget, domestic consumption and growth should see further acceleration," Grant Thornton India LLP Partner Prashant Mehra said.

Mehra said, "This will increase traction in domestic M&As as well as inbound investments.

With specific boost to infrastructure, FDI and more money in the hands of the people, 2017 should be a very exciting year for deal making".

Domestic deals were the flavour of the month as 23 such transactions worth $1.6 billion were announced during January.

Sector-wise, energy and natural resources led the deal activity by contributing over 55 per cent of the total deal value.

Start-ups continued to lead M&A deal volumes contributing 22 per cent of total deal volumes.

The month also witnessed some big ticket deals valued over $100 million each in sectors such pharma, healthcare and biotech, and infrastructure management.

ONGC acquiring 80 per cent in Gujarat State Petroleum Corporation's Krishna-Godavari basin gas block for $1.2 billion was the deal of the month, the report said.