M&A Street on fire in January

NEW DELHI: Indian deal-street is on a rock fest. With the Tata-Corus deal finally coming through, the first month of the year has started with a bang of $14.6-billion worth of strategic M&A deals ��� which is 72% of the total M&A deals announced by Indian companies last calendar year as a whole.

Private equity (PE) funds, which were the biggest driver of equity deals in India last year, have also kicked off on a high note with $1.66-billion worth of PE deals in one month, the largest in any single month till date in the country.

According to data compiled by Grant Thornton, in the first month of the year, a total of 45 M&A deals worth $14.6 billion were announced compared to 27 deals worth $2.6 billion in January 2006. The spike clearly came through due to the announcement of Tata Steel���s acquisition of Corus.

Of this, 22 were domestic deals worth $300 million where both the acquirer and the target were Indian companies. Prominent deals included Alembic���s acquisition of Dabur Pharma���s non-oncology formulations business and Aditya Birla Group���s buyout of Trinethra Super Retail.

The major deals were struck in the cross border arena. There were 23 cross border deals worth $14.3 billion, out of which 18 were outbound deals worth $14.2 billion, where Indian companies bought assets overseas.

Apart from the Tata-Corus deal, other major deals were Aban Offshore���s deal for increasing its stake in Sinvest and Subex Azure���s acquisition of Syndesis. Among the large inbound deals was UBS��� acquisition of Standard Chartered���s MF business.

While the strategic deals were on a high, PE funds were busy sewing a string of transactions on their own. While internationally, PE funds are associated with buyouts of companies, in India they have been picking minority stakes.

In the first month of the year, 56 PE deals were recorded worth $1.66 billion. Compare this with 2004, when for the entire year, India clocked just $1.1 billion worth of PE deals.

vivek.sinha@timesgroup.com