India crosses $100b deal value in 2018

The Indian corporate sector has witnessed merger and acquisition deals in excess of $100 billion for the first time in 2018, despite tepid growth in the private equity activity. In the process, the country has emerged as the favourite destination for strategic deals over China.

According to the data compiled by PricewaterhouseCoopers, the total deal value in India in 2018 stood at a whopping $105.3 billion, up 53.7% from $68.5 billion in 2017, backed by the $16 billion Walmart-Flipkart deal.

The average deal size in 2018 also shot up by a whopping 71% to $64 million per deal from $38 million per deal in 2017.

An analysis of data provided by PwC reveals that the top three deals made up 28.2% of total deals in India. The biggest deal of the year — Walmart’s buy of Flipkart for $16 billion — alone comprised 15.2% of the total deal value during the year.

The top five M&A deals during the year were Walmart-Flipkart ($16 billion), Tata Steel– Bhushan Steel ($7.5 billion), Bharti Infratel-Indus Towers ($6.2 billion), Hindustan Petroleum-ONGC ($ 5.8 billion) and Arysta LifeScience-UPL Corporation ($4.2 billion).

Out of the total deals worth $105.3 billion, $71.3 billion came in the form of strategic M&As, while the rest of $34 billion came in the form of private-equity (PE). The strategic M&As in the country increased in India during the year by 106% from $34.6 billion in 2017. In contrast, M&A deals declined 21.5% during the same period in neighbouring China.

China, during the year, saw strategic M&As worth $576.6 billion in 6,677 deals, as against $734.45 billion in 7,863 deals during 2017, according to the data available with Institute of Mergers Acquisitions and Alliances (IMAA).

The PE activity in India saw a tepid growth during the year, as it grew by just $100 million, as against $33.9 billion in 2017. The tepid growth in the PE segment is mainly on the back of pick up in the IPO activity.
“We have seen more and more PE firms looking for an exit. That is why there is a drop in the PE deals this year. Also, as a result, the IPOs have gone up,” said Sanjeev Krishnan, Private Equity and Deals Leader, PwC India.
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