Powered by Reliance Industries deals, M&As up 6% in 3rd quarter at $21.6 billion

Mumbai: The deal street has come out of the record lows in the pandemic-washed out June quarter with transaction value growing almost 6 per cent to $21.64 billion in the third quarter, thanks to a string of equity sales by Reliance in its telecom and retail arms, says a report.

According to the data collated by Mergermarket, the deal value in the quarter ending September rose 5.9 per cent y-o-y to $21.64 billion across 76 deals, while in terms of volume this is down a full 33 per cent from 114 transactions valued at $20.44 billion in the year-ago period, as the pandemic continues to negatively impact the economy.

Domestic deals jumped 130 per cent in terms of deal value to $9.46 billion across 37 deals in the third quarter compared to $4.12 billion across 28 deals in the second quarter. On yearly basis, such deals were down 10.3 per cent from $10.55 billion across 49 deals.

Largest domestic transactions in the September quarter were the acquisition of Future Group's retail & wholesale businesses along with logistics & warehousing businesses by Reliance Retail Ventures for $3.38 billion, and Motherson Sumi's $3 billion acquisition of Samvardhana Motherson International in a reverse takeover transaction. For the first nine months of 2020, M&A activity rose 17.2 per cent to $68.15 billion across 269 transactions, even though the deal count slipped 24.22 per cent over the same period last year.

Of the total value, as much as a third or $22.3 billion came through Reliance between late April and September when it sold around 25 per cent in the telecom arm Jio Platforms and around 10 per cent in Reliance Retail during the third quarter. Of the total, inbound deal value in the three quarters increased by 27.7 per cent to $39.9 billion compared to $31.3 billion during the same period in 2019. However, inbound deals slowed down in September quarter to $12.18 billion across 39 deals compared to June quarter at $20.3 billion across 48 deals, recording a 41 per cent quarter-on-quarter drop in value.

While inbound Chinese investments at $385 million across three deals plunged 63 per cent in deal counts compared to the same period in 2019 when it stood $1.8 billion across eight deals in the first nine months of 2020, inflows from the US soared 300 per cent to $24.98 billion across 61 deals over the same period in 2019 when it was a paltry $6.2 billion across 80 deals.