India Inc On Global Expansion, Outbound Merger And Acquisition (M&A) Deals Up 38 Fold During H1 FY ’11: ASSOCHAM

Mumbai, Oct 20, 2010 (Washington Bangla Radio / pressreleasepoint) Despite the decline in inbound M&A deals, the outbound deals increased substantially from USD 527.81 million to USD 20769.88 million, cornering a share of 39.43 per cent of the total deals during April-September 2010. The major inbound M&A deals occurred in telecom, metal & mining and energy sectors during the period.

The study undertaken by the ASSOCHAM reveals that in the first half of FY’ 11, there has been an increase of 38 fold in the outbound M&A activities by registering 59 deals worth USD 20769.88 million as against the corresponding period of last year.

The AFP Study titled “Trend of M&A in India (April-September 2010)” elaborated that the total number of M&A deals were increased from 86 in first half of 2009 to 141 during first half of 2010. In value terms, the overall M&A deals rose by 345.16 per cent from USD 11832.35 million (April-September 2009) to USD 52673.32 million (April-September 2010).

“The rise in outbound deals provides clear evidence that the Indian industry is consolidating, and at the same time aggressively working on global expansion”, said by Mr. D. S. Rawat, Secretary General ASSOCHAM.

During the first half of the current fiscal, the inbound, outbound and domestic M&A deals occupied a share of 15.41 per cent, 39.43 per cent and 45.16 per cent with 14, 59 and 68 number of deals respectively, added the Assocham Study.

As per the sector wise the major mergers and acquisitions occurred in telecom, metal & mining and energy sector. During the first six months of FY ‘11, telecom sector topped the list with 31.51 per cent share of the total valuation of M&A deals that took place in India, followed by metal & mining sector accounted for 24.08 per cent, energy sector accounted for 23.59 per cent while pharmaceutical and BFSI sector accounted for 7.11 per cent and 5.28 per cent respectively.

The number of M&A activities in the past six months shows that the Indian telecom sector is all set to take on the global markets. There were 8 inbound, outbound and domestic M&A deals took place in telecom sector during April-September 2010, valuing to USD 16.60 billion, representing 31.51 per cent share in total valuation of the M&A deals that occurred during the period.

Other sectors like IT & ITES, steel, consumer non durable, cement, real estate, hospitality, media & entertainment, consumer durable and healthcare and aviation witnessed 92 M&A deals for an amount totaling to USD 4.44 billion, contributing only 8.43 per cent share in total M&A deals.

Among the major outbound deals during April-September 2010 was India’s telecom major Bharti Airtel completed a deal to buy Kuwait-based Zain Telecom's African business for USD 10,700 million.

The other major outbound M&A deal occurred in the BFSI sector, India’s Hinduja Group acquired Luxembourg-based KBL European Private Bankers SA for USD 1690 million (USD 1.69 billion) to expand its wealth-management business in Europe.

In other outbound deal took in metal & mining sector Adani Enterprises, India’s largest importer of coal, bought coal mine assets in Queensland from Australia's coal-to-liquids company Linc Energy for USD 2720 million. India’s Vedanta Resources Plc's acquired London based Anglo American Zinc for USD 1338 million.

The next major merger and acquisition outbound deal recorded in energy sector, India’s Reliance Industries Ltd (RIL) picked up a 45 per cent stake in Texas, US-based Pioneer Natural Resources Co. for USD 1320 million. 

Trend of M&A deals in India

 No. of deals 
Amount (USD million)
Deals April-September 2009  April-September 2010  April-September 2009  April-September 2010
Inbound 23  14  9129.30  8116.78
Outbound  27  59  527.81  20769.88
Domestic 36  68  2175.24  23786.66

- pressreleasepoint