Growth fuels M&A appetite

Growth fuels M&A appetite

Indian companies have entered into a record number of mergers and acquisitions (M&As) in 2010, striking deals worth $36 billion (around Rs1.67 trillion) until the start of June, according to Bloomberg data.That’s only counting the 152 transactions whose values are available publicly. The reasons for the surge in M&A activity are evident enough. Faster growth in the world’s second fastest growing major economy has improved corporate profits and cash flows. Equity markets have bounced back and access to capital, at relatively lower rates, has been easier. Not only are Indian companies such as Bharti Airtel, India’s biggest mobile phone firm, buying assets abroad, foreign firms such as Abbott Laboratories are also acquiring local companies to tap a market of 1.2 billion people. Investment bankers and analysts say this year will see more M&A deals as industries such as telecommunications and pharmaceuticals consolidate, and the corporate turnaround story gets stronger.

Also See Growth and M&A (Graphic)

Compiled by Ashwin Ramaritham & Ravi Krishnan

Graphics: Ahmed Raza Khan / Mint; Illustrations: Jayachandran / Mint