The value of announced mergers & acquisitions (M&A) deals involving Indian companies reached US$31.5 billion in 2013, an 11.5% decline from last year’s activity, and the lowest annual period since 2009 (US$21.5 billion). Deal count also slowed down as number of M&A transactions dropped 12.6% to 967 from 1,107 announced deals in 2012.
In the fourth quarter of 2013, overall Indian M&A totaled US$7.1 billion, a 28.5% sequential increase from the third quarter of 2013 but, on the other hand, saw a 29.8% drop from the fourth quarter of 2012.
The average M&A deal size for transactions with disclosed values involving India climbed up to US$76.1 million so far this year, as more deals were announced above US$1-billion in value, compared to US$73.5 million in 2012.
Domestic M&A stood at US$5.2 billion, down 68.9% compared to last year, and the lowest annual period since 2004 (US$2.0 billion). The bulk of domestic activity focused on the Materials sector with US$1.5 billion, down 75.4% from last year, but nonetheless captured 29.4% of India’s domestic M&A activity this year.
Total cross-board M&A grew 56.8% to US$24.7 billion compared to the annual M&A activity in 2012 driven by the 43.5% and 83.1% increase in India’s inbound and outbound M&A activity, respectively.
Completed M&A deals involving Indian companies totaled US$29.0 billion, a 49.5% growth from last year’s US$19.4 billion volume.
Energy & Power Takes the Lead with 21.1% Market Share
The Energy & Power sector accounted for majority of the acquisitions involving Indian companies with 21.1% market share worth US$6.7 billion, a 173.3% increase from last year. Healthcare followed next and captured 15.8% of the market share with US$5.0 billion worth of deals, up 24.5% from the previous year.
The Industrials (14.9%) and Telecommunications (13.9%) captured an aggregate market share of 28.8% as both sectors witnessed a significant rise in deal value with a triple digit percentage increase of 164.7% and 347.3%, respectively, from 2012.
Private Equity-backed M&A in India Down 46% – Lowest since 2009
Buyside Financial Sponsor M&A activity targeting Indian companies totaled US$2.6 billion in 2013, a 45.6% decline from 2012, and witnessed its slowest annual period since 2009 when deal value fell to US$2.4 billion.
The Healthcare sector accounted for 25.7% of the private equity-backed M&A activity in India with US$661.3 million, despite the 1.1% drop in deal value from last year. High Technology accounted for 22.7% of the private equity-backed M&A activity in India with US$584.0 million, a 225.7% increase from the comparable period last year despite the 15.0% drop in the number of announced private equity-backed M&A deals this year.
India Inbound M&A Activity Up 43.5% in 2013
Foreign firms acquiring Indian companies in 2013 reached US$15.0 billion, a 43.5% increase from last year, despite number of announced deals slipping 13.3% from 2012.
The bulk of inbound acquisitions focused on the Healthcare sector in terms of deal value and captured 27.3% of India’s inbound M&A activity with US$4.1 billion, a 102.2% growth from the previous year’s volume.
United Kingdom-based Unilever PLC raised its interest to 51.55% by acquiring a 14.78% stake in Hindustan Unilever Ltd for INR 600 (USD 11.177) in cash per share, or a total value of US$ 3.573 billion (INR191.82 billion).The deal bolstered acquisitions in India from United Kingdom to reach US$7.0 billion, which accounted for 46.9% of India’s inbound M&A activity in terms of deal value.
Meanwhile, United States saw the most number of deals with 86 announced M&A transactions worth US$3.6 billion.
India Outbound M&A Grew 83.1% YTD
Indian acquisitions overseas surged 83.1% to US$9.7 billion in 2013 after witnessing a slow year last 2012 (US$5.3 billion).
India’s outbound acquisitions focused on the Energy & Power sector as deal value reached US$5.6 billion, and captured 58.4% of India’s foreign acquisitions. Industrials followed in second place with 27.8% of the market share, or US$2.7 billion worth of announced M&A deals.
Mozambique was the top most targeted nation in terms of value which accounted for 52.9% of the market share worth US$5.1 billion from three deals. United States, however, saw the most number of announced transactions with 21 deals valued at US$2.8 billion, a 53.3% increase from last year and captured 28.8% of India’s outbound M&A market share.
Completed M&A Advisory Fees in India Up 33.2%
According to estimates from Thomson Reuters/ Freeman Consulting Co., M&A advisory fees from completed transactions in India totaled US$133.4 million in 2013, a 33.2% increase from the comparable period in 2012.
Citi took the top spot for imputed fee rankings on M&A advisory work related to completed M&A deals in India for the year 2013 with US$16.2 million, and accounted for 12.1% market share of the fee pool.