Moderate M&A activity in first two months with 170 deals worth $4.2 bn: Grant Thornton

The first two months of the year saw moderate M&A activity with only 170 deals worth $4.2 billion as cross-border activity remained tepid during the month, according to a new Grant Thornton India report.

"The mergers and acquisitions (M&A) scenario remained moderate in the first two months of 2014 with 170 deals worth USD 4.2 billion, thanks to a pick-up in in-bound following the Sembcorp investment in NCC Power Projects. But cross-border deal activity remained rather lukewarm," Grant Thornton India partner for transaction advisory services Raja Lahiri said in a note.

He noted though that there was some activity in the telecom sector towards consolidation, with Bharti's acquisition of Loop Mobile for Rs700 crore, and it was the e-commerce sector which saw many PEs/ venture capital (VC) deals.

The total M&A and private equity deals in February were valued at $ 2.6 billion from 83 deals, as against $ 3.3 billion from 75 deals in the same months of 2013, he said.

Despite the overall deal value, which was lower, volume remained steady in the month.

Aman Resorts' acquisition of Silverlink Holdings for $358 million was the top M&A deal representing 20 per cent of total M&A deal value.

In an interview with CNBC –TV18 Lahiri said, sector wise from an M&A perspective hospitality had emerged as a key sector.

He said Aman Resorts had bought out Silverlink Holdings which was basically a clutch of resorts that DLF had bought and it had "kind of sold off" to Aman Resorts in a $300 plus million transaction. He added the second was Thomas Cook's acquisition of Sterling Holidays.

Lahiri said from a private equity perspective the good news was there was some interest in the infrastructure side.

He said there was the Canadian Pension Investment Board putting in a good sum of money in Larsen and Toubro infrastructure and IDFC and Temasek parking their money in GMR Infrastructure.

He added, it was a transaction where they swapped their stake in GMR Energy into GMR Infra and so, these were the top deals.

Leap Wireless added Grant Thornton was seeing good amount of interest in the e-commerce sector, with eBay buying Snapdeal along with other private equity sectors.

From a telecom perspective Bharti Airtel had bought Loop Mobile which again was an emerging trend of consolidation in the Indian telecom sector, he concluded.