Corporate dealmaking bottoms out along with the stock market
Its not just the stock market which seems to have bottomed out, so is corporate dealmaking in India.
By Vivek Sinha, ET Bureau |
NEW DELHI: Its not just the stock market which seems to have bottomed out, so is corporate dealmaking in India. Number of strategic merger & acquisition(M&A) transactions, which declined for five straight months starting September 2008 saw an uptick for the first time in March, as per data compiled by advisory firm Grant Thornton.
The bankruptcy of US investment bank Lehman Brothers last September had accentuated global credit crisis affecting corporate deals as investors turned cautious.
There were 21 M&A deals worth $2.27 billion in March in the country as per the latest data compiled by Grant Thornton. The data captures all deals which are announced which may or may not fructify in the same month. The two large deals announced last month include the merger announcement between Reliance Industries and Reliance Petroleum besides American Tower Corp���s acquisition of Xcel Telecom.
The number of M&A deals has been dropping month on month since September when there were 35 transactions followed by 26 each in October and November. It fell further to 21 in December 2008 with volumes declining to 18 in January 2009. Month of February reported M&As worth $243 million spread across 17 transactions.
"One of the key reasons for the surge in deal values in March is increase in consolidation and reorganisation activities, in addition to a more positive outlook towards strategic acquisitions. We expect the consolidation initiatives to increase in future," said Grant Thornton partner CG Srividya.
But private equity deals are yet to bounce back with just 10 PE transactions reported during the month, the lowest in three years. The total value of announced PE deals was pegged at $278 million with not a single $100 million plus transaction.
The bankruptcy of US investment bank Lehman Brothers last September had accentuated global credit crisis affecting corporate deals as investors turned cautious.
There were 21 M&A deals worth $2.27 billion in March in the country as per the latest data compiled by Grant Thornton. The data captures all deals which are announced which may or may not fructify in the same month. The two large deals announced last month include the merger announcement between Reliance Industries and Reliance Petroleum besides American Tower Corp���s acquisition of Xcel Telecom.
The number of M&A deals has been dropping month on month since September when there were 35 transactions followed by 26 each in October and November. It fell further to 21 in December 2008 with volumes declining to 18 in January 2009. Month of February reported M&As worth $243 million spread across 17 transactions.
"One of the key reasons for the surge in deal values in March is increase in consolidation and reorganisation activities, in addition to a more positive outlook towards strategic acquisitions. We expect the consolidation initiatives to increase in future," said Grant Thornton partner CG Srividya.
But private equity deals are yet to bounce back with just 10 PE transactions reported during the month, the lowest in three years. The total value of announced PE deals was pegged at $278 million with not a single $100 million plus transaction.
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