April M&A tally at $1.66 bln; rise in inbound deals: Grant Thornton

NEW DELHI: Corporate India announced merger and acquisition (M&A) transactions worth USD 1.66 billion in April, with inbound deals being the flavour of the month as foreign firms continued to show interest in Indian businesses.

According to audit and advisory firm Grant Thornton, the total value of M&A deals in the month of April were valued at USD 1.66 billion through 39 deals as compared to USD 1.97 billion by way of 60 transactions during the same period of last year.

Though there was a decline in M&A value on a year on year basis, there has been a significant increase in inbound deals and this trend is likely to continue in the coming months.

"Cross border deals and in particular inbound deals are seeing strong resurgence. Unilever's investment announcement preceded the Diageo transaction, which is now in its final legs. These are two significant transactions," Grant Thornton India LLP Partner, India Leadership Team, Harish HV said.

Out of the total USD 1.66 billion deals in April, cross border deals were worth USD 1,121 million, followed by domestic deals (USD 488 million) and mergers and internal restructuring at USD 60 million.

Harish further said: "We expect significant uptick in the inbound arena. Similarly, we are seeing resurgence in outbound transactions and expect to see significant uptick in this area from both, IT and manufacturing sectors."

Etihad Airways acquiring 24 per cent of Jet Airways for USD 379 million was the deal of the month.

Other major M&A deals in April include Bharti Airtel, acquiring 100 per cent stake in Bangladesh's Warid Telecom, followed by Aditya Birla Nuvo selling its carbon black business to group firm SKI Carbon Black for Rs 1,451 crore and Qatar-based investment firm Hassad Food buying majority stake in basmati rice company Bush Foods for over USD 100 million.

"We continue to see Indian corporates focused to divest non-core assets to enhance liquidity such as DLF stake sale in wind power assets for over USD 100 million," Grant Thornton India LLP Partner, Transaction Advisory Services Raja Lahiri said.

Lahiri further added that "given the FDI regulatory changes in sectors and government's push to attract FDI, the Etihad-Jet transaction is good for the aviation sector and we believe that more such inbound deals are expected to play out in sectors such as aviation, retail and broadcasting".