Indias overall M&A activity increased 21.9%

India Infoline News Service | Mumbai |

This is the highest first-half period for overall Indian announced M&A since 2011 (US$27.3bn).

The value of announced mergers & acquisitions (M&A) deals involving Indian companies reached US$20.5bn during the first half of 2014, a 21.9% increase from the first half of 2013. This is the highest first-half period for overall Indian announced M&A since 2011 (US$27.3bn). 
 
Deal count slowed down 11.2% to 517 from 582 announced transactions during the first half of 2013.
 
The average M&A deal size for transactions with disclosed values involving India climbed up to US$95.0 million this first half of 2014 compared to US$62.8 million over the same period last year, as more deals were announced during the first half of this year valued US$500-million-and-above.
 
Domestic M&A stood at US$10.1bn, up 295.9% compared to the first half of 2013. This was driven by Sun Pharmaceuticals pending acquisition of Ranbaxy Laboratories for US$4.0bn in a stock swap transaction. The deal pushed the Healthcare sector to capture 39.6% of Indias domestic activity.
 
Total cross-board M&A dropped 45.5% to US$7.3bn compared to the first half of 2013 as both inbound and outbound activity declined from the first half of 2013. Inbound M&A fell 41.3%, while Outbound M&A decreased 57.8% over the same period last year. 
 
Completed M&A deals involving Indian companies totaled US$14.9bn, a 20.7% increase compared to the first half of 2013 (US$12.4bn), and the highest first half period since 2011 (US$20.7bn).
 
Healthcare Captured 21.6% Market Share - Highest since 2010
The Healthcare sector accounted for majority of the acquisitions involving Indian companies with 21.6% market share worth US$4.4bn, an 83.8% increase from the first half of 2013, and the highest first half period since 2010 (US$5.2bn). Energy & Power sector followed next and captured 19.0% of the market share with US$3.9bn worth of deals, up 16.0% from the same period last year.
 
The TMT sector (Technology, Media, and Telecommunications) captured an aggregate market share of 13.3% as combined deal value increased 22.5% to US$2.7bn from the first half of 2013.
 
Private Equity-backed M&A in India Witness Surge in Deal Value
Buyside Financial Sponsor M&A activity targeting Indian companies totaled US$2.8bn this year, up 129.0% in deal value compared to the first half of 2013, and witnessed the highest first six-month period since 2011 (US$3.4bn).  This was driven by an acquisition of Jaiprakash Power Venture Ltds two hydro power plants by an investor group comprised of TAQA India Power Ventures Pvt Ltd (51%), INDO- AFRICA Inc (39%) and India Infrastructure Fund II (10%) in a deal valued at US$1.6bn. The deal also pushed the Energy & Power sector to account for 59.4% of the private equity-backed M&A activity in India. 
 
India Inbound M&A Activity Down 41% from 1H 2013
Foreign firms acquiring Indian companies reached US$5.9bn this year, a 41.3% decline from the first half of 2013 alongside a 4.3% drop in number of announced deals. 
 
The bulk of inbound acquisitions focused on the Consumer Staples sector in terms of deal value with US$2.2bn worth of transactions, despite a 42.0% decrease over a year ago. Consumer Staples captured 36.8% of Indias inbound M&A activity followed by Energy & Power sector with 16.6% market share.

United Kingdom is currently the top acquirer of Indian companies in terms of value with US$2.1bn from 11 announced deals, and accounted for 35.5% of Indias inbound M&A activity.  Meanwhile, United States saw the most number of deals with 49 announced M&A transactions worth US$1.3bn, down 54.4% in value from the same period last year.
 
India Outbound M&A Declined 57.8% - Lowest since 2009
Indian acquisitions overseas stood at US$1.4bn during the first half of 2014, a 57.8% decrease from the comparative period last year, and the lowest first half period since 2009 (US$350.0 million). 
 
Indias outbound acquisitions focused on the Energy & Power sector as deal value reached US$496.1 million, down 80.0% over the same period last year, and captured 34.3% of Indias foreign acquisitions.
 
Industrials followed closely behind with 34.1% of the market share, or US$492.7 million worth of announced M&A deals. 
 
United States was the top most targeted nation in terms of value and number of deals and accounted for 34.8% of the market share worth US$503.3 million from 20 announced transactions.
 
Completed M&A Advisory Fees in India Up 32.8%
According to estimates from Thomson Reuters/ Freeman Consulting Co., M&A advisory fees from completed transactions in India totaled US$77.9 million during the first half of 2014, a 32.8% increase from the comparable period last year.
 
Bank of America Merrill Lynch took the top spot for imputed fee rankings on M&A advisory work related to completed M&A deals in India for the first half of 2014 with US$15.9 million, and accounted for 20.4% market share of the fee pool.
 

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