Revision as of 21:34, 3 July 2018

Top M&A deals in India

2008-18

India- related M&A deals, 2008-18
From: Reeba Zachariah & Boby Kurian, After record first half, M&A deals face election jitters, July 2, 2018: The Times of India

See graphic:

India- related M&A deals, 2008-18

2017, 2018 H1: a surge

Reeba Zachariah & Boby Kurian, After record first half, M&A deals face election jitters, July 2, 2018: The Times of India

Recover From Note Ban, GST Impact To Clock $68Bn In Jan-June

Bulge-bracket buyout opportunities have soared as Indian merger and acquisition (M&A) activity notched up a record-breaking first half in 2018.

Both foreign interest in Indian assets — or inbound activity — and domestic-consolidation deals were the highest in a decade, recovering from the disruptions caused by demonetisation and GST rollout. The tediously progressing bankruptcy cases also added buoyancy to deal street even as outbound acquisitions by Indian companies, a major theme in the last decade, lost sheen.

The big story was the return of foreign strategic acquirers after a few tepid years. Walmart’s $16-billion acquisition of online retailer Flipkart rallied sentiments of overseas buyers as the first six months saw Schneider along with Temasek buying L&T Electricals for $2.5 billion and Teleperformance snapping up BPO firm Intelenet for around $1 billion.

Dealogic data showed inbound activity in the first half of 2018 at almost $26 billion, dribbling past the previous high of $25 billion in 2011. Similarly, domestic consolidation deals swelled to about $39 billion — well past $30 billion in the first six months of 2010. In terms of full-year highs, the previous record for inbound deals was more than $29 billion in 2011 and for domestic activity about $49 billion in 2010.

Overall, Indian M&A activity — including outbound deals — stood at $68 billion in the first half, surging past $65 billion in entire 2017 and looking to eclipse $92 billion reported in 2010.

Foreign strategic buyers and private equity funds are chasing large buyout deals worth at least $20 billion in the second half of the current calendar. Among these are sale of GSK Consumer’s sale of Horlicks and other health food drinks; Kraft Heinz’s divestment of Complan, Glucon-D and Nycil; Punjab National Bank and Carlyle selling PNB Housing Finance; bidding process for Fortis Healthcare; and imminent sale of Ramky Infra.

ArcelorMittal and Russian investor VTB-led Numetal are chasing the Essar Steel acquisition through the bankruptcy sale process, which is expected to pick up momentum amid high drama in the coming weeks. About $210 billion worth of stressed assets are up for grabs, several of them clogging the country’s National Company Law Tribunal.

There are deals that are not in the public domain, such as KKR & Co’s talks with Allied Blenders & Distillers and discussions around Piramal and TPG’s exit from Shriram Capital. Financial services firm Ambit Group’s CEO Ashok Wadhwa said, “There is a long list of potential acquirers for generally good, liquid assets like PNB Housing and Fortis Healthcare.” Private equity, global pension funds and sovereign wealth managers like Blackstone, KKR, CPPIB and GIC of Singapore remain bullish on Indian buyouts.

If the momentum continues, domestic and inbound M&A deals would set new highs in 2018. But there are worries that several ongoing large deals could be pushed back as the economy gears up for bruising general elections and corporate earnings don’t keep pace with valuations. A section of bankers are predicting a sharp deceleration, as witnessed during the second half of 2011, as anti-corruption campaigns signalled the descent of the earlier United Progressive Alliance government.

EY partner and M&A head Ajay Arora said large private equity investors, which have been in the country for long and seen multiple election cycles, would stay on course with buyout opportunities pouring into the market. “The recent set of large deals in the market might also attract foreign strategic acquirers keen on leading Indian assets,” Arora added.

2014

India and the world, value of cross-border mergers and acquisitions, 2014; Graphic courtesy: The Times of India, November 19, 2015

See graphic:

India and the world, value of cross-border mergers and acquisitions, 2014

Mid-2016: M&As up as consolidation sets in

The Times of India, Aug 03 2016

Mergers and acquisitions in 2016-growing by the month, January to July; Graphic courtesy: The Times of India, Aug 03 2016

Anand J

Startup M&As surge on funds crunch

As venture funding slows down, startups seem eager to sell themselves off. This is showing up in a surge in mergers & acquisitions (M&As).

In July 2016, there were as many as 36 M&As, almost twice that in June and about three times the January and February numbers, according to data from startup research firm Xeler8. The second quarter of this year saw three big distress sales -FabFurnish, Jabong and Hiree.

Data from Tracxn, another startup research firm, also shows a significant increase from the second half of last year, when funding started slowing down. From 32 M&As in the second half of 2014, the figure went up to 67 in the first half of 2015, to 79 in the second half of last year and was 75 in the first half of this year. The data is collected based on media reports, and announcements in social media, blogs and websites.

Another VC investor, who did not wish to be named, said that in most segments market leaders are emerging. “This was expected. Cash is air for startups. When you don't have money to pay , employees leave and that creates so much negative sentiment in the company that entrepreneurs lose heart,“ he said. While Indian startups raised around $3.5 billion in the first half of 2015, the funding dropped to $2 billion in the first half of 2016, says a report by KPMG and startup research firm CB Insights.

Xeler8 finds that the mostfunded sectors and the ones that attracted the highest number of entrepreneurs -including local commerce and e-commerce -have seen the biggest consolidation. Delhi-NCR, which is estimated to have the highest number of local commerce and e-commerce startups, saw 29 M&A deals in the first half of this year, followed by Bengaluru at 26 and Mumbai at 16.

The year's biggest acquisition was by Quikr, which bought online real estate platform CommonFloor for around $100 million, while the asking price was around $160 million. Myntra acquired Jabong for $70 million.

March 2017, top mergers

See graphic:

Top mergers and acquisitions in India, March 2017

Top mergers and acquisitions in India, March 2017; The Times of India, March 21, 2017

Till May 2018

Top M&A deals in India, till May 2018
From: Samidha Sharma, World’s largest company buys India’s most valuable startup in biggest global e-comm deal, May 10, 2018: The Times of India

See graphic:

Top M&A deals in India, till May 2018