M&A deal value slows 9% to $38 billion in the first half of 2024

Deals to pick up in the second half, say bankers

The deal value of mergers and acquisitions (M&A) in the first half of calendar 2024, despite the rising stock markets, slowed 9 per cent to $38 billion as against $41.74 billion in the same period of 2023.

The Bloomberg data says this is the lowest since 2017, when it had touched $37.48 billion (see chart).

The acquisition of ATC Tower, a telecom tower company, by Data Infrastructure Trust for $2.5 billion is the largest transaction so far in the year.

The number of transactions was, however, 17.3 per cent up in the first half to 1,460 transactions as against the 1,245 in the same period last year.

M&A advisors say deal flows are driven by factors such as scale, market share, distribution network, synergy, and customer access. There could be different combinations of such factors in different sectors and different scenarios.

“The recent actions on cement or in several parts of the financial services sector are examples of such imperatives. Given the changing economic landscape, the deal flow is likely to accelerate,” said Ketan Dalal, founder and managing director, Katalyst Advisors, a tax and M&A advisory firm.

Bhavin Shah, private equity leader and seals leader, PwC India, a consulting firm, said M&As were expected to pick up in 2024 with a favourable and stable political and economic environment.

The recent acquisitions in the cement industry by Ambuja Cements and Ultratech show M&As are picking up, say bankers.

Bankers said the next wave of transactions would be led by private-equity players sitting on significant “dry powder” (funds not deployed) for investment. American private equity majors including Blackstone, KKR, and Bain & Co have announced plans to deploy funds for investment in India and are in talks with companies.

“We plan to deploy 20 per cent of our $5 billion for investment in India,” Sarit Chopra, partner and head of special situations (Asia), Bain Capital, said in an interview on Friday.

Private-equity players are looking at health care, financial services, consumer retail, and infrastructure for investment. Officials of Blackstone Inc, the largest investor in Indian companies so far, have said they want to invest an additional $25 billion over five years.

Goldman Sachs Group Inc plans to invest $4 billion over the same period. For Temasek, the Singapore-based fund, it is $10 billion in the next five years.

KKR & Co is planning to invest a significant portion of its new $6.4 billion Asia-focused fund in the Indian infrastructure sector.

MA Deals India

Period	Deal Count	% change YoY	Amount ( $ Bn)	% change YoY
2014 H1	414		21.46
2015 H1	744	79.7	18.66	-13.0
2016 H1	895	20.3	25.26	35.3
2017 H1	799	-10.7	37.48	48.4
2018 H1	1025	28.3	81.33	117.0
2019 H1	1040	1.5	46.02	-43.4
2020 H1	859	-17.4	55.29	20.2
2021 H1	1240	44.4	62.45	12.9
2022 H1	1916	54.5	134.36	115.2
2023 H1	1245	-35.0	41.74	-68.9
2024 H1	1460	17.3	38.00	-9.0

Source Bloomberg
Compiled by BS Research Bureau