Outbound M&A deals lose 76 per cent valuation between April-August '08

29 October 2008

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