India Inc's July M&A deals down 34% at $1.5 bn: Grant Thornton

NEW DELHI: Corporate India's merger and acquisition deal value touched $ 1,503 million in July, registering a decline of over 34 per cent compared to the corresponding period last year, says a report.

According to audit and advisory firm Grant Thornton, total M&A deal value announced by India Inc stood at $ 1,503 million through 40 transactions. There were 44 deals worth $ 2,291 million in the same period last year.

Moreover, total M&A deal value for the first seven months of this year stood at $ 15.43 billion, down by 38 per cent from $ 25.08 billion during the same period in 2012.

However, excluding internal mergers and restructuring deals, the year-to-date M&A deal values has increased by 36 per cent to levels seen in the same period last year.

"The month of July witnessed the Holcim-Ambuja-ACC deal, which was largely an internal group restructuring which included Ambuja Cements paying $ 585 million to Holcim India as part of the restructuring," Grant Thornton India LLP Transaction Advisory Services Partner Raja Lahiri said.

Going forward the M&A deal value is likely to witness significant traction.

"We have already witnessed some large billion dollar deals like Apollo Tyres - Copper Tyres transaction this year and expect M&A action in sectors such as retail, aviation, pharma going forward," Lahiri added.

Cross border deals in July 2013 experienced a drop compared to July 2012 both in value and volume.

This was seen due to two large outbound deals in July 2012 (GMR Group - United Fiber System for $ 598 million and Sahara Group - Plaza Hotel for $ 570 million) together amounting to $ 1,168 million.

The top three deals of July include a multi-layered deal proposed by Swiss giant Holcim for its two Indian units Ambuja Cements and ACC, followed by Cipla's $ 512 million takeover deal and consequent acquisition of 100 per cent of the shares issued by Medpro and Shriram Capital's 7 per cent stake acquisition in Shriram City Union Finance for $ 85 million, Grant Thornton said.