• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

IT, ITES grab big pie in M&A deals; Outbound deals surpass inbound

New Delhi , Jan. 6

The Corus and Hutch deals may grab the headlines in 2007, but the sheer number of mergers and acquisition (M&A) deals struck last year has made 2006 a milestone year for India Inc.

The total number of deals struck in 2006 was estimated at 782 ($28.2 billion) compared with 467 ($18.3 million) in 2005. Of these, there were 480 M&A deals and 302 private equity ones.

According to the Dealtracker study by Grant Thornton, there were 480 M&A deals with a total value of about $20.3 billion in 2006 with the average deal size being $42 million.

Main Contributors

IT & ITES was the clear leader with the sector garnering 20 per cent share of the total number of M&A deals. Pharma, healthcare and biotech had the second highest share at 10.4 per cent. Other significant contributors to the deal volume were media and entertainment, banking and financial services, FMCG, food and beverages.

Cross border deals also increased significantly in the year from 2005. There were 266 cross border deals worth $15.3 billion in 2006 as against 192 deals worth $9.5 billion in 2005. There has been a phenomenal growth rate in outbound deal value as well as volume. There were more outbound deals (Indian companies acquiring international companies) than inbound deals both in value and volume terms.

Private Equity

The largest proportion of outbound acquisitions were in Europe (42 per cent of deal value), followed by North America (24 per cent of deal value). Private equity investments also saw substantial growth in 2006. From $1.1 billion invested in 60 deals in 2004, $2 billion in 124 deals in 2005, private equity investments increased to $7.9 billion in 302 deals in 2006.

The value of private equity deals increased by 287 per cent during 2006. There were more than 29 deals of over $50 million as against 10 deals in 2005. The average private equity investment ticket size increased from $16.40 million in 2005 to $26.02 million in 2006.

Some of the big deals included Kohlberg Kravis Roberts & Co's $900-million investment in Flextronics Software Systems; Providence Equity Partner's $400-million investment in Idea Cellular and Temasek Holdings Pte's $330-million investment in Tata Teleservices Ltd.

More Stories on : Overseas Investments | Mergers & Acquisitions

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Hopes of record wheat harvest

Copyright © 2007, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line