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Global headwinds cause steep fall in Mergers & Acquisitions activity in August
September, 27th 2019

The month also saw active deal-making in the pharma and healthcare, e-commerce, banking, retail, and media and entertainment sectors.

Owing to global uncertainties, Mergers & Acquisitions (M&A) in August fell by 36 and 49 per cent in terms of volume and value respectively, according to Grant Thornton.

Last month saw only 23 deals worth less than $1 billion. Compared to July, M&A activity saw a steep fall, with over five times fall in deal value in August as against five high-value deals worth $4.1 billion recorded in July. August registered 41 per cent decline in volume over the previous month, according to Grant Thornton’s Dealtracker.

August saw only one deal valued over $500 million and one deal worth over $100 million, aggregating $0.7 billion and accounting for 84 per cent of the total M&A deal value. The largest deal in August was from the energy and natural resources sector, with the Adani-GMR deal valued at $512 million followed by manufacturing sector including Air Water’s buyout of Linde India. These two sectors witnessed one deal each and together contributed about 83 per cent of the total M&A activity in terms of value.

Contrary to July, August was dominated by deals in the IT and ITeS sector with eight deals worth $35 million, pushed by consolidation in the software development and the IT solutions segment, while start-ups remained active after the IT sector with five deals worth $25 million. The month also saw active deal-making in the pharma and healthcare, e-commerce, banking, retail, and media and entertainment sectors.

Domestic M&A value recorded 55 per cent increase over August 2018 due to encouraging measures and easing reforms, said Pankaj Chopda, director, Grant Thornton India LLP. He added that while core sectors like energy and manufacturing saw high-value M&A deals to consolidate operating capacities, pare debt and deleverage assets, technology segments like start-ups, IT and e-commerce dominated the deal space with 15 deals, pushing the M&A deal volumes during the month.

So far this year, M&A activity continued its weakest performance over last year. While in value terms, it was a 70 per cent decline, with just over 4 multi-billion dollar deals happening so far in 2019 as against 13 deals seen during 2018. In terms of volume though, the decline was a respectable 10 per cent.

M&A poor show
August saw an aggregate of $0.7 billion deals, accounting for 84 per cent of the total Mergers and Acquisitions deal value.

deal of the month
The largest deal in August this year was from the energy and natural resources sector, with the Adani-GMR deal valued at $512 million.

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