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  • Thomson Reuters – Private Equity & Merger & Acquisitions 2015 India

    Published on January 5, 2016

    The value of announced mergers & acquisitions (M&A) deals involving Indian companies reached US$35.1 billion in 2015, a 4.8% decrease compared to a year ago. This is the lowest annual period for overall Indian announced M&A since 2013 (US$29.5 billion).  The average M&A deal size for transactions with disclosed values dropped to US$70.3 million this year compared to US$77.6 million over the same period last year, as deal activity involving Indian companies witnessed only four deals above US$1 billion compared to six deals in 2014.

    Domestic M&A stood at US$9.7 billion, down 46.4% over a year ago, and saw the lowest annual period since 2013 when deal value dropped to US$5.1 billion.  The Industrials sector accounted for 15.9% of India’s domestic M&A activity with US$1.5 billion worth of announced deals, up 13.9% from last year. Energy & Power, Financials and Retail sector followed behind and captured 12.3%, 11.7% and 11.6% of India’s domestic M&A activity, respectively.

    Total cross-border M&A increased 73.1% to US$23.2 billion compared to 2014. Outbound M&A activity grew 112.3% in value from the comparative period last year. Inbound M&A activity increased by 63.8% from the same period in 2014.

    Completed M&A deals involving Indian companies totaled US$27.8 billion, a 5.9% increase in deal value compared to 2014 (US$26.2 billion), as deal count grew 12.0% from last year.

    Energy & Power Captured 17% Market Share

    The Energy & Power sector accounted for majority of the acquisitions involving Indian companies with 16.9% market share worth US$5.9 billion, down 2.5% in deal value from last year.  Industrials followed behind in second place with 14.2% market share as deal value increased to US$5.0 billion, up 78.7% from the same period in 2014.  Financials, High Technology and Healthcare captured 12.9%, 11.4% and 10.0% market share, respectively.  The Retail industry captured 8.2% of the market share so far this year with US$2.9 billion worth of deals, as deal value grew significantly by 143.4% from last year.

    Private Equity-backed M&A in India Up 129% – Highest since 2007

    Buyside Financial Sponsor M&A activity targeting Indian companies totaled US$6.8 billion in 2015, a 129.0% increase in deal value compared to last year. This is the highest annual period since 2007 when deal value reached US$6.9 billion. Private equity-backed M&A in India’s High Technology sector accounted for 32.7% of the market share with US$2.2 billion worth of transactions.

    India Inbound M&A Activity Increased 63.8 % – Highest since 2011

    Foreign firms acquiring Indian companies reached US$17.8 billion in 2015, a 63.8% increase in deal value over a year ago as number of announced inbound deals grew 12.0%. This is the highest annual period since 2011 (US$19.8 billion).

    The bulk of India’s inbound acquisitions focused on the Energy & Power sector in terms of deal value with US$3.3 billion worth of transactions, a 130.3% increase over a year ago. Energy & Power accounted for 18.6% of India’s inbound M&A activity followed by Financials and High Technology sectors with 17.0% and 16.7% market share, respectively, after witnessing triple digit percentage increase in deal value from last year.

    United States is currently the top acquirer of Indian companies in terms of value and number of deals with US$7.5 billion from 132 announced deals, and accounted for 42.4% of India’s inbound M&A activity.  United Kingdom and Japan trailed behind and accounted for 19.7% and 5.9% market share, respectively.

    India Outbound M&A Increased 112.3% – Highest since 2013

    Indian acquisitions overseas stood at US$5.4 billion in 2015, a 112.3% increase coming from a slow period last year, and the highest annual period since 2013 when volume increased to US$7.3 billion.

    India’s outbound acquisitions focused on the Healthcare sector as deal value reached US$1.7 billion, a significant increase compared to US$208.2 million during the same period last year, and captured 32.1% of India’s foreign acquisitions. The Energy & Power sector followed behind with 23.4% market share worth US$1.3 billion, up 154.6% in value over a year ago.  Industrials, which accounted for majority of the activity last year, slipped to fifth place as deal value dropped 32.2% to US$429.5 million from US$633.5 million in 2014.

    United States was the top most targeted nation in terms of value and number of deals and accounted for 40.0% of the market share worth US$2.2 billion from 41 announced transactions. Russia followed in second place with 23.1% market share worth US$1.3 billion from 2 deals.

    Completed M&A Advisory Fees in India Down 40%

    According to estimates from Thomson Reuters/ Freeman Consulting Co., M&A advisory fees from completed transactions in India totaled US$96.8 million in 2015, a 40.2% decline from the comparable period last year.

    Avendus Capital Pvt Ltd took the top spot for imputed fee rankings on M&A advisory work related to

    Completed M&A deals in India for 2015 with US$11.4 million in related fees, and accounted for 11.8% of the wallet share.

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