Ongoing global uncertainties dampen M&A deal activity in Aug: Report

Corporate India's merger and acquisition activity moderated in August with 23 deals worth USD 845 million, the second lowest monthly deal volume till date amid ongoing global uncertainties, says a report.

According to Grant Thornton's monthly M&A Dealtracker, the prevailing economic uncertainties resulted in August recording 36 per cent decline in terms of number of deals and 49 per cent fall in value terms.

In August 2018, there were 36 deals worth USD 1,660 million.

"Owing to global trade tensions and failure to record big ticket deals during August 2018, cross-border values fell by over five times. However, on the positive side, the domestic M&A values recorded a 55 per cent increase over August 2018 on the back of encouraging measures and easing reforms," Pankaj Chopda, director at Grant Thornton India LLP said.

The month of August witnessed only one deal valued over USD 500 million and one deal valued over USD 100 million each.

"Domestic transactions were primarily themed around acquisition of stressed assets to strengthen market leadership position, divestment consequent to global transaction, compliance with competition commission requirements in India and investments in technology products to improve market offerings and efficiency," Chopda said.

In the first eight months of this year, there were 287 transactions worth USD 22,855 million, while in the corresponding period of the last year there were 318 deals worth USD 75,408 million.

The largest deal during August was seen in the energy and natural resources sector, with the Adani-GMR deal valued at USD 512 million, followed by Air Water's acquisition of Linde India in the manufacturing sector.

Contrary to the previous month, August was dominated by deals in the IT and ITeS sector, pushed by consolidation in the software development and IT solutions segment. The start-up sector remained active after the IT sector with five deals worth USD 25 million.

The month also witnessed deals in the pharma and healthcare, e-commerce, banking, retail, and media and entertainment sectors, the report said.