Foreign firms involved in 61% merger and acquisition deals in India
April, 18th 2011
India has emerged as an attractive investment destination for global investors as 61% of merger and acquisition deals in the first quarter of this year were by foreign firms of Indian entities and going forward this trend is likely to heat up further.
According to mergermarket, the M&A intelligence service provider, in India out of 57 deals that took place this quarter, 35 deals had foreign bidders.
As much as 61.4% of all the activities in India were inbound deals -- a significant portion compared to 27.1% for China, or 14.3%, for Japan.
"Inbound M&A drove deals in Q1 2011 with India proving itself an attractive investment destination as it lured buyers in the energy, insurance and IT space.
Despite the ongoing wave of corporate scandal and political corruption, India will continue to entice suitors on the back of strong fundamentals such as its growing population," mergermarket Asia Pacific Deputy Editor Anjali Naik said.
The interest of foreign companies and their subsidiaries on Indian entities is likely to see a further uptrend as Korea and Russia are likely to start entering India along with the US, Europe and Japan.
"Buyers from typical markets such as the US, Europe and Japan could be joined by those from Korea and Russia and deals across borders - consumer, financial services, energy, industrial, engineering and chemicals - will continue.
Overseas activity in energy, consumer and IT are also expected to grow," Naik added.
According to mergermarkets' India M&A Q1 2011 round-up, cross-border deals dominate the top deals table, with four inbound and one outbound deals qualifying as the five largest deals announced in Q1, 2011.
As many as 57 deals totalling $18.3 billion has been recorded in Q1, 2011, a 270.6% increase in value as compared to the same quarter last year, the second most active quarter in Indian M&A in terms of deal value, beaten only by Q2, 2010 when $26.4 billion worth of deals were announced.
Deal volume, however, has decreased by nine deal counts, it added.
Morgan Stanley has topped the financial advisor league table by value, having advised on $12.9 billion worth of deals, and Yes Bank came out on top in terms of value, participating in five deals this quarter.
The latter represented a giant step up for the India-based lender, having qualified for 36th place last year.
AZB & Partners continue to lead the legal adviser league tables both by value and deal count, having worked on eleven deals totalling $9.7 billion in Q1, 2011, it added.