Indian M&A volume spikes to record $48.6 bn this year

Indian M&A volume spikes to record $48.6 bn this year

New Delhi: Volume of merger and acquisition deals involving Indian firms increased four-folds to touch a record $48.6 billion so far this year, driven by the multi -billion dollar buyout of Zain Africa by telecom major Bharti Airtel.

“Indian acquisition volume stands at a record high of USD 48.6 billion (around Rs2.23 lakh crore) so far this year, up nearly four-fold on 2009 year-to-date," global deal tracking firm Dealogic said in a report.

Bharti’s $10.7 billion acquisition of Kuwait-based Zain’s African assets was the second largest deal by an Indian company after Tata Steel snapped one with Anglo Dutch steel maker Corus for about $12 billion in 2007.

The Bharti-Zain is the largest deal in terms of volume in BRIC region so far in 2010, the Dealogic data showed.

Experts believe mergers & acquisitions have seen an increase in the past few months as Indian companies are becoming less risk averse and their appetite for inorganic growth has risen considerably.

The BRIC (Brazil, Russia, India and China) nations combined M&A volume stands at $193.9 billion in the reviewed period, up 50% from the corresponding period in 2009.

The BRIC acquisitions account for 17% of global M&A volume in 2010 so far. The deals include domestic as well as cross border acquisitions by the BRIC countries.

Out of the four BRIC nations, China is the leading acquiring nation and accounts for 46% of total BRIC acquisitions. Chinese acquisitions volume rose 35% to $88.6 billion so far in 2010 compared to the same period last year.

Chinese cross border acquisitions account for 35% share of the $88.6 billion this year so far, an increase of 20 percentage points compared to its 2009 YTD share.

The mergers and acquisitions volume of BRIC nations had dropped drastically in 2009 to around $120 billion, due to the downturn impacting the global financial climate.