M&A deals number jumps 75% in Nov; value plunges 48%: Report

A total of 49 merger and acquisition deals worth USD 1.5 billion were recorded in November, demonstrating an impressive growth rate of 75 per cent in terms of volume, according to a report.

However, absence of any big-ticket transaction lead to a 48 per cent drop in the total deal value at USD 1,496 million in November compared to USD 2,885 million in November 2018, Grant Thornton's monthly M&A Dealtracker said.

Total M&A deals in volume terms were 49 last month against 28 transactions in the same month of last year, the report said.

"While the question of recession or no recession' continues to be debated, November 2019 reported 49 transactions aggregating to USD 1.5 billion. M&A deal volumes in both domestic and cross-border categories exceeded the November 2018 levels. However, absence of large ticket transactions dragged down the deal values in November 2019," said Pankaj Chopda, Director, Grant Thornton India LLP.

This included only four deals valued over USD 100 million each, together totalling to USD 1 billion and accounting for 67 per cent of the total M&A deal values, the report added.

According to the report, NCLT approval for Patanjali Ayurved's bid (USD 613 million) for Ruchi Soya was the largest transaction of the month.

Retail, consumer, banking and financial services were the key sectors which attracted maximum M&A traction. Start-ups continued to be the favourites for M&A in deal volume terms, it added.

The year-to-date (YTD) deal activity failed to match up to the levels seen in previous years with values falling by more than half of YTD 2018 with just one month remaining in the year and volumes declining by 15 per cent.

M&A in YTD 2019 recorded a significant fall in deal values on account of 14 marquee billion-dollar deals witnessed in YTD 2018 compared to only four witnessed this year, the report said.

Manufacturing, energy, start up pharma, banking, IT, infra, retail, consumer and e-commerce sectors led the deal values in YTD 2019, capturing 91 per cent of the total overall deal values.

On the other hand, start up and IT sectors continued to drive deal volumes capturing 36 per cent of the total deal volumes.

"As the year ends, the long vacation period towards the end of the month does not promise too much action on the deals front. However, it does provide the impetus to come back fresh in the new year to revisit the opportunities left incomplete. Further, with several new opportunities untapped, we expect 2020 to be more exciting on the deals front," Chopda added.