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Mergers and acquisition (M&A) deals in India posted a 96 per cent fall in value terms in April this year over the same month last year in the absence of large-ticket transactions. April 2018 recorded big-ticket transactions such as the $14.6-billion Bharti Infratel-Indus Tower deal.
Similarly, the year-to-date (January to April 2019) witnessed a significant drop in the M&A deal activity with a 65 per cent fall in M&A deal values, while volumes fell by 7 per cent compared with YTD 2018. The M&A YTD 2019 saw two deals in the billion-dollar category and 18 deals estimated above $100 million each, together contributing 91 per cent of total M&A deal values, according to a study by Grant Thornton.
35 deals
During the reporting month, both domestic, merger and crossborder transactions took a back seat, compared with April 2018 and March 2019. The month recorded only 35 deals totaling $0.7 billion.
“M&A transactions experienced low traction in all three segments – domestic, crossborder and mergers. Key transactions for the month included Amazon’s investment for acquisition of More Supermarket Chain, Infosys’ acquisition of the Netherland-based mortgage administration services company of ABN Amro and Reliance Jio’s acquisition of Haptik Infotech; these three transactions constituted 73 per cent of the overall M&A deal values for the month. Absence of large ticket merger transactions and non-closure of IBC transactions impacted the overall M&A transaction values,” said Pankaj Chopda, Director, Grant Thornton India LLP.
Driven by Amazon’s strategic stake acquisition in Witzig Advisory Services in order to acquire Aditya Birla’s More and comply with the latest Foreign Direct Investment norms on e-commerce, the retail and consumer sector led the deal value with 43 per cent of the total M&A values.
IT sector deals
This was followed by deals in IT solutions and data analytics and AI segment of IT and ITeS, IT, pharma and e-commerce sectors with 13 deals following the common rational of boosting synergies, expanding product lines and capturing market share.
The M&A transactions in April 2019 witnessed a significant drop in the deal values by 92 per cent, compared with March 2019, despite a healthy 17 per cent rise in the deal volumes.
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