The Hindu Business Line : M&A value dips 20% in Sept

Mumbai, Oct. 20 With the financial crisis looming large, the value of merger and acquisition (M&A) deals announced in September dipped 20 per cent to $3.69 billion against $4.63 billion in August, according to Grant Thornton.

The number of M&A deals in the first 9 months of 2008 stood at 381, with an announced value of $26.43 billion, against 527 deals amounting to $49.33 billion in the same period last year.

India MNC

Mr Harish H.V., Partner, Transaction Advisory Services, said the global crisis in liquidity will see re-rating of global valuations and would provide some good acquisition opportunities for India Inc.

“We will see deals coming not only as a result of companies wanting to sell but also because their financial backers are stressed for liquidity. These deals will prove to be of great value to India Inc, which is well on its way to becoming India MNC when the global crisis recedes in the next 12 to 24 months,” he added.

There were nine domestic deals valued at $0.04 billion and 26 cross-border deals with an announced value of $3.65 billion. Among cross-border deals, 20 were outbound with Indian companies acquiring overseas business (valued at $1.03 billion) and 6 were inbound deals (international companies or their subsidiaries acquiring Indian business) with an announced value of $2.62 billion.

The most significant deals have been Daiichi Sankyo Co increasing its stake to 58 per cent (through an open offer) in Ranbaxy Laboratories Ltd for $1.70 billion, the UAE-based Emirates Telecommunications Corp buying 45 per cent in Swan Telecom for $0.90 billion and Suzlon Energy increasing its stake to 86 per cent in REpower Systems AG for $0.39 billion.

PE deals

Private equity investments seem to have suddenly dried up. Private equity deals in September dropped 36 per cent to $600 million against $944 million in August.

The value of PE deals in the first nine months of 2008 stood at $9.29 billion against $11.73 billion in the same period last year.

In September, there were two IPOs listed, which raised $65.61 million. The funds raised through IPOs between January and September 2008 were $4,471.01 million from 41 offerings.

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