New Delhi: India Inc, along with other emerging markets Brazil, China and Russia, continues on its merger and acquisition overdrive with the total M&A volume from BRIC nations surging past the $100-billion mark in the current quarter.
Despite the 47% in the global M&A market in third quarter of 2007 from the previous quarter, M&A volume from BRIC countries rose 5% to $100.1 billion from $95.5 billion in the second quarter, according to global financial data provider Dealogic.
Besides, the number of large value deals also increased in the quarter, contrary to the general perception that the US subprime crisis would adversely impact the deal volumes.
“Sixteen deals over $1 billion were announced in Q3 2007 for BRIC countries compared to 12 such deals in Q2 2007 and 12 deals in Q1 2007,” Dealogic’s Kaushik Punjabi said.
The year-to-date BRIC M&A activity has soared to $278.4 billion via 3,686 deals, up 52% from 182.6 billion via 3,342 deals in the same period last year.
The India M&A volume has doubled to $49.1 billion via 893 deals in 2007 YTD, from $22.9 billion via 626 deals in the same period of 2006, with cross border transactions accounting for 56% of total volume.
The Russian Federation leads with $102.3 billion via 445 deals so far this year, up 63% from $62.9 billion in the year-ago period. This year Russia saw seven deals worth $5 billion, comprising 54% of total Russian Federation volume till date.
An analysis of the M&A deals shows that utility and energy was the most targeted industry by BRIC so far this year with $48.3 billion through 191 deals, followed by oil and gas industry with $45.2 billion (120 deals).
JP Morgan was the leading M&A advisor to BRIC countries in 2007 YTD with $57.5 billion and 23 deals followed by UBS with $36 billion through 37 deals while Morgan Stanley’s tally stood at 32.9 billion dollar by way of 27 deals.
In the top five BRIC M&A deals so far this year two are related to India — Vodafone’s acquisition of controlling stake in Hutch Essar for $12.9 billion and the government’s acquisition of 59.74% stake in SBI for $8.7 billion.
The biggest deal was Unified Energy System of Russia’s acquisition of 29.62% in Federal Grid for $13.3 billion. The second largest was Russian firm Interros Holding’s acquisition of 27.39% for $9.9 billion.