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Finance Friday: M&A Activity in India, Down but not out

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During the first half of 2009, Indian companies were involved in a total of 136 Mergers & Acquisition deals, down 54% from the same period in 2008, according to a study by Venture Intelligence .

mergers acquisitions

The deal activity was also down 28% compared to the second half of 2008. It is in certain ways quite acceptable. The global economy suffered badly during the fag end of 2008 and the negative effects were felt across all sectors. The cash to expand and grow was missing so to speak. Moreover, with the market valuations hit badly, there could have been a certain skepticism when it came to look out for alliances / buy-outs.

But, as the title says, M&A activity may not be booming but it has not disappeared from the Indian Marketplace either. The number of deals might have gone down and may be the big ticket acquisitions are not happening, but Indian companies are enjoying a fair share of the global M&A scene.

The deal radar in 2008 centered around the Daiichi-Sankyo’s acquisition of Ranbaxy for $4.5 billion which was the largest deal in 2008.

The recent big ticket acquisition also came from the Pharma sector. The Pharma major Wockhardt has agreed to divest its nutrition based businesses to the US-based Pharma company Abbot Laboratories for a hefty sum of Rs.627 crores.

Some other noteworthy deals that kept the M&A sector busy were,

TARGET ACQUIRER DEAL VALUE (Rs. Crore)
Nutrition Business of Wockhardt Abbott Laboratories 627
UMP UTV Software Communications 223
Future Logistics Solutions Li & Fung 145
Shriram City Union Finance Norwest Venture Partners 121
Indian Film Company Network18 Media 210
FIIT JEE Matrix Partners India Investments 100

Source: Business Today

These were some recent M&A deals involving more than 100 crore. What is interesting to see here is that media and education have outclassed the darling of M&A – The Telecom Sector. 

Infact, along with FIIT JEE , Carrier Point Info systems also saw a capital infusion of over 50 crores from Franklin Templeton. With the VC’s and the private equity players getting increasingly interested in the Education Sector, it is only about time that the innovations in education start coming soon.

With the economic conditions getting better and the valuations still at decent levels, my feeling is that the M&A scene in India should only get better.

[This Finance Friday post has been written by Ankit Agarwal, an ERP Consultant by profession, a wannabe entrepreneur and stock market stalker by passion]

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