The value of announced mergers and acquisitions (M&A) deals involving Indian companies reached an all-time high with $72.4 billion in 2016, up 97.1 per cent compared with 2015. The growth was driven by industry consolidations, restructurings and asset sales. This is also the highest-ever annual period for overall Indian announced M&A in terms of deal value, surpassing the annual record set in 2007 with $67 billion.
The average M&A deal size for transactions with disclosed values reached $120 million in 2016, compared with $68.7 million from last year. Deal activity involving Indian companies this year witnessed 15 deals above $1 billion, compared to only 4 in 201, according to the data by Thomson Reuters.
Domestic M&A witnessed the best-ever annual period on record in terms of deal value with $28.2 billion, up 186.2 per cent from over a year ago period as number of deals grew 8.3 per cent. Total cross-border M&A amounted to $42.8 billion, up 74.2 per cent compared to 2015, driven by a 75.3 per cent and 69.7 per cent increase in inbound and outbound M&A activity, respectively, from the last year.
Energy and power sectors accounted for majority of acquisitions involving Indian companies with 29.9 per cent market share worth $21.6 billion, a 254.5 per cent increase in value from $6.1 billion last year. The sector witnessed highest-ever annual deal value in 2016. The biggest deal was pending stake acquisition in Essar Oil by Petrol Complex of Singapore, a unit of Rosneft, and a consortium of Trafigura and United Capital Partners in two separate transactions with a combined value of $12.9 billion.
The finance industry captured 17 per cent market share worth $12.3 billion, a 176.2 per cent increase in value from last year. This was driven by a merger between HDFC Standard Life Insurance and Max Life Insurance through a three-step process.
Materials captured 12.7 per cent market share worth $9.2 billion, up 269.6 per cent compared to the last year. Telecommunications represented 12.4 per cent market share worth $9 billion, bolstered by Aircel’s $4.9 billion acquisition of Reliance Communications’ wireless business.
Foreign firms acquiring Indian companies reached $34.1 billion in 2016, a 75.3 per cent increase in deal value from last year and surpassing the record set in 2007 at $31.4 billion.
The bulk of India’s inbound acquisitions focused on the energy and power sector in terms of deal value with $13.8 billion worth of transactions, a 278.5 per cent increase over the previous year.
Russia is currently the top acquirer of Indian companies in terms of value with $12.9 billion and accounted for 37.8 per cent of India’s inbound M&A activity. Indian acquisitions overseas stood at $8.7 billion in 2016, a 69.7 per cent increase from the last year, while number of announced outbound deals grew 9.7 per cent. This is the highest annual period since 2011 when outbound deals reached $9.6 billion.
India’s outbound acquisitions, too, were focused on energy and power sectors as deal value reached US$4.2 billion, and captured 48.4 per cent of India’s foreign acquisitions in terms of value.
Once again, Russia was the most targeted nation in terms of value with five announced deals worth $4.3 billion, up 235.4 per cent over a year ago. The United States saw the most number of outbound deals from Indian companies with 45 transactions amounting to $1.2 billion.
Domestic and Inbound M&A deal activities both reached a record high, reflecting the much-awaited consolidation in various sectors such as insurance, telecommunications, media & entertainment, energy and power, and even retail. Increase in asset sales by Indian companies to deleverage their balance sheets also was high. Indian asset sales reached a record high of $44.9 billion,” said Elaine Tan, senior analyst, deals intelligence- Asia Pacific AND Japan, Thomson Reuters.
Consolidation, restructuring and asset sales by highly leveraged companies are expected to continue and drive M&A activity in India for 2017, he added.
sangeethag@mydigitalfc.com
The average M&A deal size for transactions with disclosed values reached $120 million in 2016, compared with $68.7 million from last year. Deal activity involving Indian companies this year witnessed 15 deals above $1 billion, compared to only 4 in 201, according to the data by Thomson Reuters.
Domestic M&A witnessed the best-ever annual period on record in terms of deal value with $28.2 billion, up 186.2 per cent from over a year ago period as number of deals grew 8.3 per cent. Total cross-border M&A amounted to $42.8 billion, up 74.2 per cent compared to 2015, driven by a 75.3 per cent and 69.7 per cent increase in inbound and outbound M&A activity, respectively, from the last year.
Energy and power sectors accounted for majority of acquisitions involving Indian companies with 29.9 per cent market share worth $21.6 billion, a 254.5 per cent increase in value from $6.1 billion last year. The sector witnessed highest-ever annual deal value in 2016. The biggest deal was pending stake acquisition in Essar Oil by Petrol Complex of Singapore, a unit of Rosneft, and a consortium of Trafigura and United Capital Partners in two separate transactions with a combined value of $12.9 billion.
The finance industry captured 17 per cent market share worth $12.3 billion, a 176.2 per cent increase in value from last year. This was driven by a merger between HDFC Standard Life Insurance and Max Life Insurance through a three-step process.
Materials captured 12.7 per cent market share worth $9.2 billion, up 269.6 per cent compared to the last year. Telecommunications represented 12.4 per cent market share worth $9 billion, bolstered by Aircel’s $4.9 billion acquisition of Reliance Communications’ wireless business.
Foreign firms acquiring Indian companies reached $34.1 billion in 2016, a 75.3 per cent increase in deal value from last year and surpassing the record set in 2007 at $31.4 billion.
The bulk of India’s inbound acquisitions focused on the energy and power sector in terms of deal value with $13.8 billion worth of transactions, a 278.5 per cent increase over the previous year.
Russia is currently the top acquirer of Indian companies in terms of value with $12.9 billion and accounted for 37.8 per cent of India’s inbound M&A activity. Indian acquisitions overseas stood at $8.7 billion in 2016, a 69.7 per cent increase from the last year, while number of announced outbound deals grew 9.7 per cent. This is the highest annual period since 2011 when outbound deals reached $9.6 billion.
India’s outbound acquisitions, too, were focused on energy and power sectors as deal value reached US$4.2 billion, and captured 48.4 per cent of India’s foreign acquisitions in terms of value.
Once again, Russia was the most targeted nation in terms of value with five announced deals worth $4.3 billion, up 235.4 per cent over a year ago. The United States saw the most number of outbound deals from Indian companies with 45 transactions amounting to $1.2 billion.
Domestic and Inbound M&A deal activities both reached a record high, reflecting the much-awaited consolidation in various sectors such as insurance, telecommunications, media & entertainment, energy and power, and even retail. Increase in asset sales by Indian companies to deleverage their balance sheets also was high. Indian asset sales reached a record high of $44.9 billion,” said Elaine Tan, senior analyst, deals intelligence- Asia Pacific AND Japan, Thomson Reuters.
Consolidation, restructuring and asset sales by highly leveraged companies are expected to continue and drive M&A activity in India for 2017, he added.
sangeethag@mydigitalfc.com
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