Millennium Post

M&A deals value soars 3.2 times to $12.1 bn in Q1

Value of merger and acquisition deals involving Indian companies jumped 3.2 times in the April-June quarter this year compared to same period of 2012, Ernst & Young said.

Merger and acquisition (M&A) activity involving Indian companies included 156 deals with a total disclosed deal value of $12.1 billion in the quarter. In the same quarter last year, 198 deals worth $3.8 billion were announced, the consultancy firm said.
Compared to the previous quarter of January-March 2013, the aggregate disclosed deal value increased four-fold from $3.1 billion, while deal count reduced by one-third from 235 deals.

'The quarter has been one of the best in recent times for the Indian M&A in terms of value. Weak rupee did not deter Indian companies with strong balance sheets and access to relatively cheaper dollar loans to acquire assets abroad,' E&Y Partner and National director, Transactions Advisory Services, Amit Khandelwal said.

In the coming quarters, he said, access to cheap foreign debt and pressure on the Indian rupee are likely to play a key role in deal-making.
'Increasing clarity on the tax and regulatory front is likely to spur more inbound deals. On the outbound front, more M&As are expected in the natural resources sector.

Local deal activity is likely to be driven by restructuring and consolidation since several domestic players have accumulated huge debt on their books,' he added. The second quarter witnessed a total of three billion-dollar deals compared to just one transaction seen in 1Q13 and all three deals were cross-border in nature.
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