M&AS poised to cross $100 billionmark in 2018
MUMBAI:THE value of mergers and acquisitions (M&AS) involving Indian companies rose 125.9% in the first nine months of 2018 to a shade below the $100 billion mark. According to Thomson Reuters data, M&A deals worth $99.7 billion were reported between January and September, surpassing the annual record of $67.4 billion in 2007. The deals table was led by Walmart’s $16 billion acquisition of Flipkart.
The uptick in M&A activity in India comes at a time when mergers in the Asia-pacific region have slowed. Asia-pacific M&A, excluding Japan, fell to $164.6 billion in the third quarter of 2018, from $171.3 billion in the year-ago period, according to Mergermarket data. The number of deals, too, have declined from 1,058 to 882, largely due to trade tensions between China and the US.
“The data for India, or Asia-pacific, is not surprising. With India’s huge consumer potential and slowing growth rates in other economies, this trend is expected to continue,” said Anil Talreja, partner, Deloitte India.
Domestic M&AS hit record levels with $46.0 billion to witness a three-fold increase in value from the year-ago period, while surpassing the annual all-time high of $25.9 billion in 2017. Domestic deals saw the busiest first nine months, up 19.4% from a year ago. Total cross-border M&A reached $51.6 billion, up 92.8% compared to the corresponding period of last year. Inbound M&A activity increased 64.6%, while outbound M&A activity grew five-times in value during the period under consideration.
Sector-wise, materials accounted for majority of the acquisitions involving Indian companies with a 19.8% market share worth $19.7 billion, or an increase of more than 10 times in deal value compared to the first nine months of 2017. It also marked the highest ever period for the sector in terms of value. Retail, financials, energy and power, and telecom were the other sectors that saw major consolidation.