Thomson Reuters M&A September 2012

Deal making slows down in Indian tech industry. Overall M&A activity sluggish: Report

Deals in the high tech industry came down by 23 % in the nine months to September 2012 as compared to the corresponding period last year, according to Thomson Reuters’ India M&A review. Overall, the value of announced mergers & acquisition (M&A) deals involving India reached US$26.4 billion, a 24.1% decline from the first nine months of 2011 due to the absence of mega-transactions, the report said.

Highlights of the report

  • Third quarter volume this year totaled US$8.3 billion, up 57.1% from second quarter of 2012 and a 17.1% increase from third quarter of 2011. The average M&A deal size for disclosed deals declined to US$74.5 million year-to-date, as compared to US$85.6 million in the same period last year as majority of India’s M&A transactions fell below US$1 billion.
  • Domestic M&A stood at US$9.7 billion, up 50.9% compared to the first nine months of 2011, the highest year-to-date volume since 2010 (US$10.9 billion).
  • Inbound BRIC M&A activity announced 1,302 deals worth US$57.1 billion, where India accounted for 19.4% (US$11.1 billion) losing 1.8 market share points compared to the same period last year. China captured 31.4% among BRIC nations with US$17.9 billion from 475 announced deals.

Private Equity-backed M&A in India Slows Down 30%

Private Equity-backed M&A targeting Indian companies slowed down during the first nine months of 2012 with 103 announced deals valued at US$3.3 billion, down 30.4% from the same period last year. Quarterly volume increased to US$1.8 billion during the third quarter of 2012, double the value from the second quarter of 2012.

India Inbound M&A Activity Declines 41%

Foreign firms acquiring Indian companies so far this year slowed down with 223 announced deals worth US$11.1 billion, a 41.5% decline from a robust first nine months of 2011 (US$18.9 billion). During the third quarter of 2012, the value of inbound M&A deals grew 42.0% to US$2.8 billion from the second quarter of 2012 and saw a 69.0% increase over the third quarter of 2011.

Indian Outbound M&A Activity Fell 55%

Indian acquisitions overseas decelerated this year as deal value amounted to US$3.8 billion, down 55.4% from the comparable period last year (US$8.6 billion). Third quarter of 2012 volume slightly increased 9.9% to US$1.6 billion from the second quarter of 2012 but declined 50.8% from third quarter of 2011. The United States accounted for 40.9% of India’s outbound activity this year with US$1.6 billion, an 18% increase in deal value from the first nine months of 2011.