India Inc's M&A deal touches $19 b in Q1 of 2010

According to VCCEdge, the financial research platform of VCCircle, the value of merger and acquisition (M&A) deals in India rose to $19.20 billion in the first quarter of this year, up from $ 5.19 billion a year ago.

The number of domestic transactions doubled from 39 deals worth $2.27 billion in Q1 of 2009 to 80 deals worth $4.06 billion in the same period of this year, VCCEdge said.

Further, there were 51 outbound deals in the period under consideration, while the figure stood at 24 a year ago. In terms of value, the increase was more than seven times, primarily due to the Bharti – Zain deal.

Inbound deals

The number of inbound deals also rose to 29 in first three months of 2010 from 24 deals in the same period of 2009.

Going forward, the value and volume of Indian M&A activity is likely to increase as investor confidence and liquidity returns to the market. “Strategic investors will try to take advantage of lower valuations in the midst of the crisis and strengthen their
position across various sectors,” the report said.

A sector wise analysis shows that telecommunication services, energy and healthcare were the most targeted sectors as these segments attracted deals worth $14.03 billion, $1.17 billion and $ 961 million respectively. Big ticket deals dominated the M&A space this year as large deals worth $100 million and above accounted for as much as 90 per cent of total capital invested in the first quarter this year.

The top two deals in the first three months of this year were the $10.7-billion acquisition of Zain’s African operations by Bharti Airtel, followed by the $1.8 billion acquisition of tower assets of Aircel by GTL Infrastructure.

Other major deals in the period under consideration include Fortis Healthcare $685-million investment in Parkway Holdings, Essar Group’s $600 million acquisition of Trinity Coal Corporation and Telenor ASA’s $433 million stake buy in Unitech Wireless.
The five major deals in the first quarter of this year accounted for over 71 per cent of the total M&A deals, the report added.

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