The value of announced mergers & acquisitions (M&A) deals involving Indian companies reached US$23.8 billion, a 6.8% increase from the first nine months of 2012, and the lowest nine-month period since 2009 (US$14.9 billion). In the third quarter of 2013, overall Indian M&A totaled US$5.4 billion, a 60.1% sequential decline from the second quarter of 2013 and a 29.5% drop from the third quarter of 2012. The average M&A deal size for transactions with disclosed values involving India climbed up to US$72.8 million so far this year, as more deals were announced above US$1-billion in value, compared to US$68.8 million during the first nine months of 2012.
Domestic M&A stood at US$3.6 billion, down 65.4% compared to the same period last year, the lowest first nine months-level since 2004 (US$1.5 billion). The bulk of domestic activity focused on the Materials sector with US$1.5 billion, down 29.4% from the same period last year, but nonetheless captured 41.2% of India’s domestic M&A activity this year. Total cross-board M&A grew 36.7% to US$19.3 billion compared to the first nine months of 2012 driven by the 178.5% increase in India’s outbound M&A activity. Meanwhile, Inbound M&A activity in India slipped 2.3% to US$10.8 billion from the first nine months of 2012.
Completed M&A deals involving Indian companies totaled US$21.8 billion, a 58.1% growth from the first nine months of last year.
Energy & Power Takes the Lead with 25.5% Market Share
The Energy & Power sector accounted for majority of the acquisitions involving Indian companies with 25.5% market share worth US$6.1 billion, a 246.7% increase from the same period last year.
The Industrials (18.0%) and Consumer Staples (16.1%) captured an aggregate market share of 34.1% and witnessed a significant rise in deal value with a triple digit percentage increase of 203.8% and 221.3%, respectively, from the comparative period last year.
Private Equity-backed M&A in India Dropped 48% – Lowest since 2009
Buyside Financial Sponsor M&A activity targeting Indian companies totaled US$1.9 billion so far this year, a 48.0% drop from the first nine months of 2012, and witnessed its slowest nine-month period since 2009 when volume fell to US$1.5 billion.
The High Technology industry accounted for 31.7% of the private equity-backed M&A activity in India with US$589.2 million, more than a five-fold increase from the comparable period last year despite the 18.8% drop in the number of private equity-backed M&A deals this year.
India Inbound M&A Activity Down 2.3% for 2013 YTD
Foreign firms acquiring Indian companies so far this year declined as deal value totaled US$10.8 billion, down 2.3% from the same period last year, and witnessed the lowest first nine months period since 2009 (US$4.4 billion).
The bulk of inbound acquisitions focused on the Consumer Staples in terms of deal value and captured 34.6% of India’s inbound M&A activity with US$3.7 billion, a nine-fold increase from the first nine months of 2012
United Kingdom-based Unilever PLC raised its interest to 51.55% by acquiring a 14.78% stake in Hindustan Unilever Ltd for INR 600 (USD 11.177) in cash per share, or a total value of US$ 3.573 billion (INR191.82 billion).The deal bolstered acquisitions in India from United Kingdom firms to reach US$4.3 billion, which accounted for 40.1% of India’s inbound M&A activity in terms of deal value.
Meanwhile, United States saw the most number of deals with 66 announced transactions worth US$2.9 billion.
India Outbound M&A Grew 178.5% YTD
Indian acquisitions overseas surged 178.5% to US$8.5 billion to date after witnessing a slow first nine months in 2012 (US$3.0 billion).
India’s outbound acquisitions focused on the Energy & Power sector as deal value reached US$5.1 billion, and captured 60.3% of the India’s foreign acquisitions. Industrials followed in second place with 31.7% of the market share, with US$2.7 billion worth of transactions.
Mozambique was the top most targeted nation in terms of value which accounted for 60.3% of the market share worth US$5.1 billion from two deals. United States, however, saw the most number of announced transactions with 18 deals valued at US$2.7 billion (31.9% of the market share).
Completed M&A Advisory Fees in India Up 20.2%
According to estimates from Thomson Reuters/ Freeman Consulting Co., M&A advisory fees from completed transactions in India totaled US$76.9 million during the first nine months of 2013, a 20.2% increase from the comparable period in 2012.
Citi took the top spot on M&A fee rankings for advisory work for completed M&A deals in India so far this year with US$14.8 million, and accounted for 19.2% market share of the fee pool.