More distressed Merger & Acquisition deals in pipeline
November, 26th 2018
Post the Insolvency and Bankruptcy Code (IBC), there has been a significant increase in the number of quality assets available at attractive valuations, providing further impetus to an already hot market for M&As in India, says a report.
According to a report by Kroll and Mergermarket, since 2017, distressed merger and acquisition (M&A) values in India have hit USD 14.3 billion, 12 per cent of the total M&A value, led by deals involving Bhushan SteelNSE -2.00 % (USD 7.4 billion), Reliance CommunicationsNSE 0.00 % (USD 3.7 billion) and Fortis HealthcareNSE 0.48 % (USD 1.2 billion).
Two-thirds of distressed transactions were classified as "direct", where the asset itself was distressed, while the remaining one-third of "indirect" transactions resulted in a sale because the parent organisation was in distress.
Close to USD 10 billion of those deals have been closed in 2018 so far.
For the purpose of this analysis, distressed M&A was defined as any transaction involving sale of a company directly in distress or where the transaction was carried out where the parent group/company was in distress.
Expectations are strong that distressed M&A will be an ongoing theme for acquisitions in the country and will increase as more companies are admitted under the IBC and make their way through the National Company Law Tribunal (NCLT) process.