Between January and September of this year, some $24.8 billion in merger and acquisition deals was generated in India alone. Well known merger and acquisition specialist Amit Raizada is originally from India himself, and he was keen to look into what is causing this significant market share.
The $24.9 billion was earned through 309 separate transactions and it represents a 10% growth compared to the same period in 2014.
Looking further into the details, Amit Raizada found the following information:
1. Between July and September, some $6.3 billion was generated in deals. This was a decrease of 37.5% compared to the quarter before it. However, it was still 18.9% higher than the same period in 2014, when just $5.3 billion was earned in deals.
2. The most active sectors for mergers and acquisitions were found in utilities, mining and energy. 28 deals were made in that sector, representing $3.7 billion. This is the equivalent of 15% of all merger and acquisition deals.
Raizada explained that one of the major players in this rise in value was the acquisition of Cairn India. This was acquired by Vendanta, who paid $2.2 billion for it. This was the largest deal to have ever targeted India and made a significant contribution to the economy overall.
Other interesting information was found in the fact that inbound deals seem to be the most popular of all. Some 110 deals were made so far in 2015, accounting for $24.4 billion. The last time acquisitions reached these levels was in 2012.
The majority of these deals were taken up by international bidders. Around $12 billion of the deals, or 43.6%, came from companies that were not based in the Asia-Pacific region. The strongest interest actually came from the US, who seems to have its eye on merger and acquisition in India.
In fact, the US invested in 63 individual deals, and this came to a value of $6.3 billion. Seven of the ten biggest deals were conducted by American companies and it doesn’t look like the US is slowing down with their acquisitions.
At the same time, however, India itself seems to have regained some of their own confidence and they are starting to make investments overseas as well. In fact, they have announced around 50 individual deals, with a total value of almost $4.4 billion itself.
This is a 163.4% increase compared to last year. In fact, over the same time period last year, the value of acquisitions by India was just $1.7 billion, which was divided across 57 different deals.
It is believed that the main reason why there is such an increase in outbound deals is because ONGC Videsh Ltd. acquired Vankorneft, a Russian company, for some $1.3 billion.
The data compiled by Raizada is based solely on transactions worth at least $5 billion. He frequently collects data on various deals that are made across the world, but he has a particular persona interest in the Indian market.
In his calculations, he also included any undisclosed deals, so long as the turnover for the merger and acquisitions target was higher than $10 million.
India’s economy is the seventh largest in the world. However, even their economy has recently been showing signs of slowing down, which has caused significant concerns on the international market.
This is also due to the fact that while the Indian economy is – or was – strong, there continue to be very many people living abject poverty. Seeing that this year is a marked improvement on last year, both in terms of inbound and outbound mergers and acquisitions could mean good news for the people of India.