The global slowdown has not only caste its shadow on ITeS, telecom, power but also pharma as of 72 cross border outbound deals that these sectors concluded in April-August 2008, lost their valuations by 76 per cent as compared to 54 such outbound deals recorded in the same period in fiscal 2007, according to Assocham assessment.

The total number of outbound mergers and acquisitions during the first five months of the current fiscal stood at 72 with a total value of $3,727.48 million against 54 deals worth $15,544.96 million during the same period in last year, points out the Assocham analysis adding that their was a decline in outbound M&A activities by 76.02 per cent.

Releasing the Paper, the Assocham president Sajjan Jindal said that despite global slowdown which adversely affected IT and ITeS the most, a total 32 M&A activities happened between April-August 2008 of which 5 were inbound, 18 outbound and 9 domestic. This was followed by pharmaceutical sector in which 5 inbound, 11 outbound and 5 domestic M&A took place.

In telecom, total 15 M&A activities happened of which 3 were inbound, 9 outbound and 3 domestic. In power sector, only 2 outbound and 1 domestic M&A happened. In other sectors, 21 inbound, 32 outbound and 27 domestic M&A took place. Interestingly, the pharma sector witnessed only 6 inbound and 5 outbound between April-August 2007 as against 4 in telecom. IT and ITeS witnessed a total of 13 M&A activities between April-August 2008 of which 9 were outbound and4 domestic.

The major mergers and acquisitions occurred in pharmaceuticals, finance, telecom, IT & ITES and power sector. During the first five months of FY '09, pharmaceutical sector topped the list with 38.69 per cent of the total valuation of M&A deals that took place in India, telecom sector accounted for 17.41 per cent, while IT and power sector accounted for 15 per cent and 8.44 per cent respectively.

Sector wise Inbound, outbound and domestic deals occurred in April to August 2008

The number of M&A activities in the past five months shows that the Indian pharmaceutical industry is all set to take on the global markets. There were 21 inbound, outbound and domestic M&A deals in pharmaceutical sector during April-August 2008, valuing to $5,250 million, representing 38.69 per cent share in total valuation of the M&A deals that occurred during the period.

Other sectors like metal & mining, auto, banking & finance, chemical, petrochemical, construction, engineering, healthcare, manufacturing, media, real estate and textile witnessed 75 M&A deals for an amount totaling to $3,642.63 million, contributing a share of 20.46 per cent.

The cross border Inbound, Outbound and domestic M&A deals occupied a 48.17 per cent, 26.49 per cent and 25.34 per cent share with 34, 72 and 45 number of deals respectively, during the period April-August 08

Domestic deals: There were 29 domestic M&A deals for a value of $2,775.24 million during April-August 2007 which increased to 45 deals that valued $3,438.68 million, contributing a share of 25.34 per cent during April-August 2008.

The major merger and acquisition inbound deal in pharmaceutical sector was Japan's Daiichi Sankyo acquiring 51 per cent stake of India's largest pharma company Ranbaxy. The deal involved a transaction of $4,600 million. Among other deals in the pharmaceutical sector: India's Jubilant Organosys Ltd. bought Canada's Draxis Health for $255 million.

Singapore-based Fresenius Kabi acquired 73.3 per cent share capital of Indian company Dabur Pharma for $220 million. India based Strides Arcolab limited acquired 55 per cent stake of Australian Genepharma for $61 million. India's Dr Reddy's Laboratories bought the US pharmaceutical contract manufacturing business of chemicals giant BASF for $40 million.

Emami's acquired 27.51 per cent equity stake of Ayurvedic Pharma Company - Zandu Pharmaceutical. Ranbaxy Labs acquired 24.91 per cent stake of Shimal Research Laboratories for USD 23.35 million. India's Sun Pharma acquired US based Able Labs for USD 23.15 million, Mauritius-based Jacob Ballas acquired Mumbai-based drug maker Themis Laboratories for USD 22.5 million.

M&A in telecom
There were only five deals that took place during April–August 2007 in telecom sector for a value of $455 million, which increased to 15 inbound, outbound and domestic deals for $2,362.75 million, representing 17.41 per cent share of the total deals occurred during April-August 2008.

The biggest M&A deal in telecom sector was India's GTL acquiring Essar telecom Infrastructure for $1,500 million. Other deals in telecom sector were India's Idea cellular acquiring a 40.8-per cent stake of Spice communication for $544 million.

IDFC Private Equity, US investment major DB Zwirn, sovereign wealth funds Singapore's GIC-managed Indivest, Qatar's Oman Investment Fund and Quippo Infrastructure acquired 18.74 per cent stake of Quippo Telecom for $185 million, India's Reliance Globalcom acquired 100 per cent stake of UK based MVNO Vanco for $76.9 Million. India's software-services company, HCL Technologies acquired US-based Control Point Solutions Inc (CPS) for $20.8 million.

M&A in IT & ITeS
A total of 13 deals occurred during April–August 2007 in the IT sector that valued $1,796.35 million, which increased to 32 deals for $2,036.57 million, representing 15 per cent share of the total deals that took place during April-August 2008.