M&A deals dip 21% to $33.6 bn

Merger and acquisition deals in the first 10 months of this year amounted to $33.6 billion, a fall of more than 21 per cent from the year-ago period, says a report by global consultancy firm Grant Thornton.

According to Grant Thornton's latest Dealtracker report, India Inc announced M&A deals worth $992 million in October, taking the year-to-date tally to $33.6 billion.

The transactions were worth $42.9 billion in the same period last year.

Grant Thornton India Partner and Practice Leader Srividya C G said, "For the first 10 months of the year, the values are significantly higher than 2009 and 2008, but lower than 2010."

For October India Inc's M&A activity has been 'stable', Srividya said, adding 'very few large deals have been announced during this month.

There has been no deal with value over half a billion and only four deals valued at $100 million plus."

There were 57 M&A transactions worth $992 million in October. There were 45 deals worth $521 million in the year-ago period, Grant Thornton said.

Inbound deals wherein foreign entities merged with or acquired Indian businesses were the flavour of the month.

There were 13 deals worth $691 million in this category against seven transactions valued at $103 million in 2010.

There were five outbound deals worth $109 million against 18 transactions valued at $377 million in 2010.

The total value of domestic deals in October was $192 million (39 deals), compared to $40 million (20 deals) in the corresponding month of 2010.

A sector-wise analysis showed that manufacturing was the sector that accounted for the maximum deal value, followed by pharma &

healthcare, IT ITeS and media and entertainment in October.

The top five deals accounted for 79 per cent of the total M&A deal values.

Meanwhile, private equity has shown a trend of slowing down for the month of October, but has grown significantly over the previous two years.

PE deal values amounted to $0.29 billion through 20 deals in October as compared to $0.31 billion by way of 26 transactions in the period under consideration last year.

However, the total PE deal summary over the last two years has increased significantly.

From $2.7 billion in the first 10 months of 2009, it increased to $4.9 billion in 2010 to $7.2 billion so far this year.

"Private equity has shown a trend of slowing down for the month of October, but has grown significantly over the previous two years.

"The number of investments for the year so far, has surpassed the last three years, showing that the activity has improved considerably," Srividya said.