PRESS TRUST OF INDIA
Mumbai, 7 July
On the back of a $5.4-billion Unilever open offer to by HUL stake, the overall merger & acquisition (M&A) deals involving Indian companies clocked a 12.3 per cent growth in the first half of 2013 at $20.1 billion over the year-ago period, according to Thomson Reuters.
“The second quarter of 2013 saw overall domestic M&As totalling $15.3 billion, a whopping 214.3 per cent sequential jump from the first quarter, driven by a $5.4-billion open offer in Hindustan Unilever by Unilever, taking the total M&As to $20.1 billion in the first half of the year,” the media and information firm said in a report.
The average deal size climbed up to $82.8 million as more deals were announced above $1 billion in value, compared to $73.1 million in the year-ago period, it said.
Domestic merger and acquisitions, however, declined by a whopping 68.3 per cent to $2.3 billion from the year ago period, marking the lowest first half-level since 2004, when it stood at $1.2 billion.
The bulk of domestic activity focused on the financial sector with $657.3 million, down 69.4 per cent from last year, the report said.
Total cross-border M&As grew 70.8 per cent to $17.0 billion compared to the first half of 2012 as inbound and outbound M&As rose 32.4 per cent and 294.5 per cent, respectively.
Of this, completed M&As stood at $12 billion, up 16.9 per cent in H1 of the current year over the same period last year.
Giving a break-up, the report said consumer staples captured 28.2 per cent, or $5.7 billion, accounting for the majority of the deals involving domestic companies, which is a 435.2 per cent jump over the same period last year.
This uptick was driven by Unilever’s pending open offer to raise its interest in HUL to 75 per cent by acquiring a 22.52 per cent for a total value of $5.4 billion. This is the biggest deal on record for consumer staples involving domestic companies.
Industrials, energy and power sectors also witnessed a significant rise in deals with a triple-digit percentage spike each, and captured 19.6 per cent and 15.7 per cent of the market share, respectively, according to the report.
Private equity-backed mergers and acquisitions slumped 49 per cent, the lowest since 2004, totalling just $834.5 million in the reporting period.