Mumbai: Indian merger and acquisition (M&A) deals for the first quarter of 2019 reached $25.8 billion, declining 16.9% in value compared to the corresponding quarter of 2018. However, it was elevated compared to historical levels, according to a report from Thomson Reuters. The number of deals, too, fell 12.9% from a year ago, the report said.
The financial sector contributed 43.6%, or $11.3 billion, to the M&A deals in the first quarter. This is an increase of 5.9% compared to the year-ago period and is the highest-ever quarterly period for the sector. Bandhan Bank Ltd’s merger with Gruh Finance Ltd for $3.165 billion in a stock swap transaction has been the biggest M&A transaction in India so far this year. Power Finance Corp. Ltd’s (PFC's)acquisition of a majority stake in REC Ltd from the government for $2.1 billion was the other billion-dollar deal announced this year. Private equity-backed M&As saw the best ever start to a year, with $4.2 billion in deal value, a 41% increase from a year ago.
PE-backed M&A in industrials at $1.6 billion accounted for 37.3%—a 10-fold increase in value from a year ago when it was $155.1 million. An investor group comprising Tata Sons Ltd, GIC Pte. Ltd, and SSG Capital Management Ltd agreed to acquire a 45% stake in GMR Airports Ltd for $1.1 billion in the biggest deal for the sector.
Inbound M&As rose 17% year-on-year, with deals involving foreign firms acquiring Indian firms reaching $7 billion, the highest since 2017.
The Carlyle Group acquired a 9% stake in SBI Life Insurance Co. Ltd for $735 million, propelling the financial sector to capture 24.5% of India’s inbound M&A activity.
Outbound M&As, however, fell 32% compared to the first quarter of last year to stand at $1.2 billion. India’s outbound acquisitions focused on the healthcare sector with a deal value of $355 million.