M&A down but may look up in long term
The merger and acquisition space in India is in the middle of a slowdown with fewer deals so far this year. This, however, is part of an overall across-the-board global lack of confidence in corporate deals, say industry experts.business Updated: Sep 21, 2013 07:58 IST
The merger and acquisition (M&A) space in India is in the middle of a slowdown with fewer deals so far this year. This, however, is part of an overall across-the-board global lack of confidence in corporate deals, say industry experts.
Consulting firms that advise on M&A are however optimistic that deal-making may pick up pace going forward.
“Growth in India has slowed down and that is a major deterrent for investments in the M&A space,” said Avinash Gupta, leader of financial advisory and senior director, Deloitte India.
The year-to-date (YTD) M&A deal value in 2013 was down 27% year-on-year, according to information from Grant Thornton Deal Tracker, which tracks M&A and related activity in India.
However, excluding internal mergers and restructuring deals, the overall M&A deal value had increased by 55% at the end of August from a year ago.
Some blame it on sellers’ greed. “Internally, within companies, expectations from the sellers about the value of their companies are sometimes unrealistic, in excess to what the buyers are willing to pay,” Gupta added about why M&A activity in India is slowing down.
According to Grant Thornton in August, the largest M&A deal was ONGC Videsh acquiring 10% of Rovuma Area 1 Offshore Block in Mozambique for $2.64 billion.
In the M&A space in August in India, top deals were in the oil and gas sector, telecom, cement, real estate and IT & ITeS, according to Grant Thornton.