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.