there has been a steady decline in the appetite of Cash stressed indian companies as well as their global counterparts for M&A deals in the last couple of years. Moreover big ticket M&As haven’t demonstrated expected synergies. Both, deal value and volumes have seen a tremendous downfall. B&E presents a snapshot of how the M&A landscape has panned out so far this year
M&A deals lose sheen
The number of M&A deals and the corresponding deal value for the first nine months of the year are on consistent decline. While in the year 2010 and 2011 deals valued at $42.5 billions and $37.6 billion respectively were completed in the first three quarters, the value fell sharply to $29.4 billion this year. On the other hand, number of deals have fallen sharply from 511 (9M 2010) to 438 for the corresponding period in 2012. The figures clearly indicate that M&As are loosing the sheen and have failed to deliver the promised value over the last few years. Further, with economic uncertainty looming large in and around India, the road ahead for such deals does not seem to be a smooth ride either. Unless organisations around the world demonstrate exceptional performance, the state of M&As is most likely to be dismal.
Cross border deals score well over domestic
82.56% of the M&A deals closed by India companies in the first 9 months of the year were across the border. This involved many big ticket deals like the $1.8 billion acquisition of RBS’ retail and commercial banking business by HSBC UK. Apart from this, Indian companies were also very active in looking out for small and medium acquisitions related to oil & gas and other natural resources. These acquisitions will eventually prove to be the backbone for the vertical integration of businesses and in the coming days, one can expect to see more such deals. On the other hand, foreign companies have also consistently engaged in buying out promising Indian companies. However, most domestic M&A deals have been undertaken to achieve operational and financial synergies between companies.
M&A deals lose sheen
The number of M&A deals and the corresponding deal value for the first nine months of the year are on consistent decline. While in the year 2010 and 2011 deals valued at $42.5 billions and $37.6 billion respectively were completed in the first three quarters, the value fell sharply to $29.4 billion this year. On the other hand, number of deals have fallen sharply from 511 (9M 2010) to 438 for the corresponding period in 2012. The figures clearly indicate that M&As are loosing the sheen and have failed to deliver the promised value over the last few years. Further, with economic uncertainty looming large in and around India, the road ahead for such deals does not seem to be a smooth ride either. Unless organisations around the world demonstrate exceptional performance, the state of M&As is most likely to be dismal.
Cross border deals score well over domestic
82.56% of the M&A deals closed by India companies in the first 9 months of the year were across the border. This involved many big ticket deals like the $1.8 billion acquisition of RBS’ retail and commercial banking business by HSBC UK. Apart from this, Indian companies were also very active in looking out for small and medium acquisitions related to oil & gas and other natural resources. These acquisitions will eventually prove to be the backbone for the vertical integration of businesses and in the coming days, one can expect to see more such deals. On the other hand, foreign companies have also consistently engaged in buying out promising Indian companies. However, most domestic M&A deals have been undertaken to achieve operational and financial synergies between companies.
For More IIPM Info, Visit below mentioned IIPM articles
