With 175% volume change, it is next to France and Hong Kong

D. Murali

Chennai, Sept. 4

In the global M&A (merger and acquisition) arena, India appears at the penultimate place, as per a recent ranking by Bloomberg.

New Zealand comes last, in terms of number and volume (dollar value) of deals, between 2006 and 2005. Its M&A volume growth is almost minus 50 per cent.

What is important in the data of `regional breakdown by target region/ country' is that with a 175 per cent volume change, India's M&A growth is blazing enough to take the country to the third slot, next only to France and Hong Kong, each of which have achieved more than 200 per cent growth.

Latin America and Canada are at distant fourth and fifth places, with 108 and 106 per cent increase, respectively. Volume changes range between 89 per cent and 9 per cent for Central Asia, Western Europe, China, Australia, UK, North America, Eastern Europe and the US. Germany saw less than 10 per cent change in volume.

India's deals numbered 255 in the first half of calendar year 2006, a mere twentieth compared to almost 5,500 deals in North America, and less than a half of Australia's. Though the number of deals in China, from January 1 to June 30, stands at 1,047 or nearly four times of the Indian tally, growth in value terms is just around 60 per cent, from $16 billion in the first half of 2005 to $26.5 billion in 2006. Closer home, the jump in deal value is from $6 billion in 2005 to $17 billion in 2006.

That the Asia-Pacific region has a long way to go is evident from the pie of the world M&A. The region has only 13 per cent share in the total M&A deal value, while EMEA (Europe, Middle East, Africa) and the Americas account for 42 per cent and 45 per cent share respectively.

Current year's global tally of transactions announced for the first six months is $1.8 trillion, a 41 per cent increase from the same time last year, says Bloomberg. In 2005, the total value of deals was $2.6 trillion; so, if the tempo of the first half of 2006 were to be maintained during the second half, the year may well wrap with more than $1 trillion increase in M&A deals. That may be conservative estimate, considering the fact that, in the second quarter of this year, "the number of mega-deals, with an announced total value of over $10 billion, rose to 17 from 14 in the first quarter."

(This article was published in the Business Line print edition dated September 5, 2006)
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