Slowdown roils Indian deal street

NEW DELHI: The deepening slowdown has had its impact on the deal market in 2019 with mergers and acquisitions (M&As) plummeting over 34% to USD 67.1 billion but still making it the second best, on the back of the USD 6-billion ArcelorMittal takeover of Essar Steel, according to a report.

As per the report by Mergermarket, M&As in 2019 was the second highest in value despite declining 34.4% in 2018, which was the bestever. But, the report is positive about 2020 as the government has eased foreign investment restrictions and plans to divest state-owned companies.

The report attributes the optimism to the relaxation in the foreign direct investment policy in August, loosening the restriction on coal and lignite mining, contract manufacturing, singlebrand retail, and digital media, which may bring more opportunities to foreign investors.

"Overall M&As touched USD 67.1 billion across 422 deals, down 34.4% in value and 3.4% in volume compared to 2018 when the street saw 437 deals worth USD 102.2 billion," Mergermarket said in a note on Monday.

At USD 67.1 billion, India accounted for 10.4% of the deals in the Asia-Pacific region, said the report.

Of the total, inbound activities remained strong with USD 37.9 billion across 221 deals, while outbound deal value plunged 84.8% to a low of USD 2 billion across 54 deals, the lowest since 2014, when it was printed at USD 1.7 billion.

The numbers would have much worse had it not been for the Essar Steel-ArcelorMittal-Nippon Steel deal worth USD 6 billion at the end of 2019.