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After hitting a three-year low in 2023, India-involvement announced M&A activity came back in January 2024, jumping 78 per cent in deal value to touch $ 6.3 billion ($ 3.6 billion), the latest LSEG Deals Intelligence data showed.
Deal value in January 2024 was led by telecommunications, industrials and consumer staples.
However, the number of M&A deals for the month under review saw a 48 per cent decline to 137 in January 2024 from 263 in January 2023.
The latest M&A activity in value terms is a strong start since January 2022, when deal value had touched a four-year high of nearly $10 billion.
M&A activity fell to a three-year low in 2023 at $83.8 billion in 2023, down 50.6 per cent from a year ago. In 2022, the total M&A activity stood at $169.70 billion and $123.14 billion in 2021.
Elaine Tan, Senior Analyst at LSEG Deals Intelligence, said, “At least two deals above $ 1 billion from the telecommunications and infrastructure sectors kicked off the start of the year in 2024. This was unlike the start of 2023, where no deal above $ 1 billion was announced until the second quarter of 2023”.
Despite uncertainty due to lingering macroeconomic and geopolitical challenges, several factors underline cautious optimism as one enters 2024, according to Tan.
The expectations for lower interest rates in 2024, the use of M&A to accelerate the adoption of technology and technology-enabled processes, energy transition and decarbonisation, pressure to deploy capital, and corporate portfolio transformation to address supply chain and reduce reliance in one country are just some of the potential drivers that could drive activity in India, Tan added.
“However, the upcoming elections in India as well as the US could still temper deal making in the short term”, Tan said.
By value, India-involvement deals targeting telecommunications accounted for 39.7 per cent of the market share worth $ 2.5 billion in January 2024, up 697 percent from a year ago. Industrials captured a 20.6 per cent market share worth $ 1.4 billion, more than a five-fold increase compared to January 2023.
In 2023, India-involvement M&A witnessed a record number of deals with more than 2600 transactions announced. This is the busiest annual period by number of announced deals involving India since records began in 1980, according to LSEG Deals Intelligence.
PE ACTIVITY SLUMPS
Private equity activity in January 2024 slumped 45 per cent in deal value to hit a three-year low at $ 713 million from $ 1298 million in the same month last year. The number of deals saw a 40 per cent decline to 93 as against 155 in the same month last year. In January 2022, the PE deal activity stood at $ 2.85 billion.
By value of deals, financial services topped the charts in January 2022 at $222 million, followed by computer software at 192 million and internet-specific sector at 112 million, LSEG Deals Intelligence data showed.
In terms of a number of PE deals, the lion’s share was in computer software, followed by internet-specific companies at 35 and 24, respectively.
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