M&A activity declines 34 per cent in 2009

During 2009, Indian companies were involved in 356 M&A deals, down 34 per cent from 2008, says a new study by Chennai-based PE and M&A research service Venture Intelligence.

These figures were lower than those for 2008, during which 543 M&A deals, including 265 deals with an announced value of $26.4 billion.

However, M&A activity in the second half of 2009 which witnessed 204 deals, was higher compared to H1 '09 that saw a total of 152 M&A deals.

In the largest M&A deal by announced value, UltraTech Cement merged Samruddhi Cement with itself to form India's largest cement company.

This was followed by ONGC Videsh acquiring the UK-listed Imperial Energy, which has oil assets in Russia for $1.9 billion, and Sanofi-Aventis' acquisition of Hyderabad-based Shantha Biotechnics for $625 million.

Over 56 per cent of the deals in 2009 were domestic acquisitions, as against the 43 per cent in 2008. Indian companies cut down on their global acquisitions drastically executing just 85 outbound transactions in 2009 as compared to the 230 in the previous year.

The US was the most preferred destination for Indian companies, which acquired 22 American companies in 2009, followed by the US and Australia, with 9 deals each.

The acquirers in 28 of the 70 inbound deals during 2009 were US-based companies, followed by German firms with 10 deals and French firms with eight deals. 

The IT & ITeS and manufacturing industries accounted for most number of acquisitions during 2009 contributing 22 per cent and 18 per cent respectively. healthcare, energy and BFSI were the next most active industries for M&A activity.

Earlier in the week, Venture Intelligence also said private equity deals in India had also declined during 2009. (See: PE investments in India decline for second straight year to $4 billion)