M&A value down 12% in 2017

Mergers and acquisitions (M&As) during the year till December 7, declined by 12 per cent to $55.93 billion from $63.48 billion in 2016. The number of deals also fell to 1,375 from 1,381 a year ago.

The falling transaction value was led by a decline in the value of deals in the energy and materials segments. The telecommunications, technology and retail sectors saw a rise in M&A activity.

The biggest deals during the year were Vodafone group's pending acquisition of Idea Cellular’s mobile business for $11.62 billion, followed by IndusInd Bank's plans to acquire Bharat Financial Inclusion for $2.39 billion and Infosys' repurchase of 113 million shares for $2.03 billion.

According to data from Thomson Reuters, the value, including net debt, of the target company rose to $22.56 billion in the first quarter of 2017, followed by $10 billion each in the second and third quarters and $12.24 billion in the last quarter.

The telecommunications industry saw 31 deals worth $18.48 billion, up from 23 deals worth $2.80 billion in the previous year. The financial sector saw 240 deals worth $9.6 billion against 225 deals worth $9.9 billion a year ago. Deals in the energy sector fell from 105 a year ago to 80 this year, and their cumulative value declined from $21.75 billion to $2.70 billion. Deal value in the materials segment declined from $9.23 billion last year to $1.78 billion this year.

The retail industry saw an increase in transaction size to $1.67 billion in 52 deals this year from $945 million in 74 deals last year. Real estate also reported $3.26 billion value in 61 deals against $1.81 billion in 42 deals a year ago. Healthcare deals declined to $3.27 billion from $5.79 billion last year.

Inbound deals rose by 8 per cent in value to $29.9 billion (317 deals) from $27.5 billion (341 deals) last year. Outbound deals fell 70 per cent to $2.57 billion (134 deals) from $8.73 billion (175 deals) last year. Private equity investments almost doubled in 2017 to $8.89 billion from $4.98 billion a year ago, although these did not reach the level seen in 2014, of $19.05 billion in 326 deals.

PE deals were led by the $2.5 billion investment by SoftBank Investment Advisers and other undisclosed investors in two transactions, followed by a $1.14 billion investment by SoftBank Group and others in ANI Technologies, which runs taxi aggregator brand Ola, and a $951 million investment by Canada Pension Plan Investment Board and KKR among others in Bharti Airtel.