14 October 2010

In the first nine months of 2010, 500 mergers and acquisitions (M&A) with a record value of US$42.2 billion were announced involving Indian targets, according to India Watch, a quarterly review released today by the leading business and financial adviser Grant Thornton. By contrast, in the same period of 2009 only 213 M&A transactions with a total value of US$ 8.1 billion were recorded. "Corporate India is gripped by a frenzy of takeovers as local businesses rush to consolidate their position in the booming economy. The total value of Indian M&A deals has increased five-fold, while the number of deals has doubled compared to the first three quarters of 2009," commented Anuj Chande, Head of South Asia Group at Grant Thornton UK LLP.

In terms of domestic deals, the year-to-date saw 293 M&A transactions with a total value of US$17.2 billion where both acquirer and target were based in India. The total domestic deal value is also three times higher than in the first three quarters of 2009, when 109 domestic M&A deals with a combined value of US$5.6 billion were recorded.

"Indian corporations are brimming with confidence and their strong balance sheets give them access to acquisition finance. Domestic deals make up the lion's share of Indian M&A, while the soaring value of Indian M&A investments abroad dwarfs the value of inbound investments," Chande explained.

In terms of cross-border M&A, Indian firms invested a staggering total of US$ 18.5 billion in 144 mergers and acquisitions involving foreign targets in the year-to-date. The deal value is more than 32 times higher than in the first three quarters of 2009, when 56 outbound deals with a total value of US$ 567 million were recorded.

Whilst the rise is largely due to the Bharti Airtel acquisition of Zain Africa BV which was announced in March and valued at US$10.7 billion, the underlying trend both in value and volume is up considerably.