Indian M&A activity slumps 83% to $2.9 billion in January-March: Report

NEW DELHI: Merger and acquisition activity in the Asia Pacific region declined 26.1 per cent in the first quarter of this year and the drop was even sharper in India where the deal activity declined over 83 per cent amid concerns regarding the country's economy, says a report. 

According to a report by global deal tracking firm mergermarket, M&A activity in the 
Asia-Pacific region as a whole dropped to $72.9 billion, a decline of 26.1 per cent by value from first quarter of 2012 ($98.6 billion). 

Deal activity in India slumped to $2.9 billion the January-March quarter, down 83.1 per cent from the corresponding quarter a year ago when transactions worth $17.2 billion were announced, underscoring the weight of concerns regarding the country's economy, mergermarket said. 

In terms of number of deals, a total of 55 deals were announced in India the reported quarter, far less than the 77 in the year-ago period. Deal count in the Asia-Pacific region in the first quarter of this year also fell to 560 from 590 in the corresponding period previous year. 

Inbound M&A activity by value fell for the second straight quarter to $2.2 billion. A total of 30 targets were snapped up by foreign buyers, the smallest number since the fourth quarter of 2011 (27 deals). 

In a similar tandem, Indian buyers were remarkably reticent in acquiring overseas targets this quarter, the report said. 

Outbound deals totalled USD 0.6 billion, the weakest performance since third quarter of 2010 ($0.6 billion). The deal count also fell to nine, the lowest since third quarter of 2009 (eight deals). 

Despite the sluggish deal market, M&A deal value in the pharma, medical & biotech space more than tripled from first quarter of 2012 (USD 0.4 billion), making it the biggest contributor to Indian M&A by value this quarter. 

"It was one of the few silver linings in what has been a very sluggish quarter for M&A in India," mergermarket said. 

In a sharp contrast, M&A in the bellwether energy, mining & utilities sector dropped to $0.4 billion this quarter, a staggering 96.3 per cent dip from the year-ago period ($10.5 billion). 

Mylan's offer for two of Strides Arcolab's subsidiaries was the largest deal this quarter and, at $1.6 billion, accounted for 55.1 per cent of the aggregate deal value in India, the report said.