Bangalore / Mumbai: Mergers and acquisitions are back after a two-year slack, with the value of inbound and outbound deals rising several times in last year.
The value of outbound deals, or the acquisition of foreign firms by Indian companies, stands at $22.6 billion (Rs1.05 trillion) so far this year—up 80 times from the same period last year, says a report by Thomson Reuters released on Monday.
The report does not include personal care products maker Godrej Consumer Products Ltd’s agreement to buy out of Latin America’s Issue Group, announced on Sunday.
The acquisition of Indian firms by overseas companies in inbound deals has reached $7.1 billion this year, up 266%, adds the report.
Experts said outbound deals are driven by the need of Indian companies to expand in particular regions. Inbound deals have been triggered by multinationals’ growing interest in India’s consumption demand and economic growth.
“The deals have increased in terms of value rather than volume,” said Sourav Mallik, executive director, M&A, Kotak Mahindra Capital Co. Ltd.
Inbound deals have been boosted by growth in healthcare, the report says, citing the recent Abbott Laboratories Inc.’s $3.72 billion buyout of Piramal Healthcare Ltd’s generic drugs unit in the highest inbound acquisition this year—and the third highest inbound acquisition on record.
India’s high technology and financial sectors have been the other targets of foreign companies.