M&A deal value falls to $20.8 bn in 2013

The aggregate value of merger and acquisition (M&A) transaction involving Indian entities was $20.8 billion last year, down 46.3 per cent over the 2012 figure, global deal tracking firm Mergermarket said.

In terms of number of transactions too, there was a decline as 2013 saw 267 M&A deals, 13 fewer than in 2012.

Inbound M&A slid for the second year to $14.3 billion, a 19.7 per cent decline from 2012 ($17.8 billion), even as the number of deals involving overseas acquirers rose to a record high (since 2001) of 147.

The decline in inbound deal volume despite a rise in number of transactions suggests that smaller targets are being snapped up by foreign buyers while larger deals are

being "stymied by concerns associated with the outcome of next year's general elections", Mergermarket said.

However, going forward "tighter access to credit is expected to result in several potential buying opportunities," Mergermarket said.

Moreover, RBI's attempts to facilitate buyouts of distressed companies may provide a fillip for private equity activity, although onerous valuation restrictions announced this week will ensure persistent uncertainty in this regard, Mergermarket said.

Outbound transactions registered a 22.2 per cent rise over 2012 as deals worth $7.7 billion were announced largely due to two acquisitions worth $5.1 billion by state-run ONGC and Oil India off the coast of Mozambique.

Unilever's $3.5 billion acquisition of a 14.8 per cent stake in Hindustan Unilever in April remains the largest deal in India this year and accounted for 16.8 per cent of aggregate M&A value in the country.

A sector-wise analysis shows that the pharma, medical and biotech experienced transactions amounting to $4.2 billion, making it the only sector to post a second successive increase in annual M&A value or volume.