Indian firms acquiring foreign companies up 369% in Jan-Jun: report

NEW DELHI,RUCHIKA SHAH: Outbound merger and acquisition deals by Indian companies, ie Indian companies acquiring overseas firms, saw a huge jump in value terms in the first six months of 2016.

In the January-June period, India’s acquisitions abroad grew 369% to $4.5 billion (nearly Rs 29,937.37 crore) compared to the same period last year, when outbound acquisition deals had slowed down, a Thompson Reuters research about India’s M&A in first half of 2015 stated.

India’s acquisition of overseas companies mainly focused on the Energy & Power sector, with deals worth $2 billion (nearly Rs 13,305.5 crore) announced. Deals in this sector accounted for 48.8% of India’s foreign acquisitions in value terms, the report said.

AT A GLANCE
India’s outbound mergers & acquisitions in Jan-Jun 2016
  • Indian firms acquiring foreign companies up 369%
  • Most deals announced in Energy and Power sector
  • Healthcare, materials, financial sectors popular too
  • In value terms, most deals with Russian companies — 44.1%
  • In number terms, most deals with US — 25

Other deals were announced in the healthcare, materials, and financial industry with 15%, 12.9% and 10.5% market share, respectively.

Most of the deals overseas by Indian companies in value terms, were with Russian companies, accounting for 44.1% market share, it said. Three deals worth $2 billion were announced.

In number terms, most of the deals were announced with US-based companies — 25 transactions worth $598.6 million. Deals with US companies accounted for 13.2% market share.

India’s crossborder deals grew 13.1%, up $9.9 billion (nearly Rs ​65,862.23 crore) compared to the same period last year.

Source: Thompson Reuters research

On the flip-side, however, foreign firms acquiring Indian companies declined 31% in the first six months of the year, in value terms, as the number of deals announced fell 17.3%. Inbound M&A activity was the lowest since 2012, the report said.

Source: Thompson Reuters research

Inbound transactions focussed on High Technology sector, with deals worth $1.6 billion announced, a 257% increase, the Reuters research report said. Industrials and healthcare followed at 16.3% and 15.5% market share, respectively.