Indian Cos Mergers and acquisitions at 4 year low

(Indian Economy Updates) - Mergers and acquisitions involving Indian firms in 2009 so far have been the lowest in four years for comparable periods, touching just $7.4 billions, thanks to the global economic slowdown.

M&A volume of $7.4 billion represents a massive 51 per cent decline from the corresponding period a year ago, global deal tracking firm Dealogic said.

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Out of $7.4-billion M&A deals involving Indian firms, inbound deals amounted to $1.6 billion where foreign firms bought stake in Indian companies.

"Inbound cross-border M&A fell to $1.6 billion via 70 deals so far this year, down 77 per cent from last year. The US remained the biggest investor in Indian firms with $483 million via 21 deals," Dealogic added.

Outbound M&A activity fell drastically to just $334 million through 34 deals, a 96 per cent fall from the same period last year. The US was the most targeted nation as M&As worth $157 million were carried out through 10 deals, compared to $1.6 billion via 29 deals last year to date.

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The oil and gas sector was the most active segment this year. The space cornered as many as six deals worth $2.1 billion. Besides the largest M&A transaction -- Reliance Industries' open offer to acquire the remaining 25 per cent of Reliance Petroleum for $1.7 billion also happened in this section.

The all-share merger deal valued at about Rs 8,500 crore between the two Mukesh Ambani group firms RIL and RPL has become probably the 10th-biggest ever for the country and the first billion-dollar deal this year.

According to Dealogic, Citi emerged as the top adviser on Indian M&A with $3.2 billion via three deals. Kotak Mahindra Bank followed suit with $2.3 billion through two deals and Morgan Stanley is in the third place with $2 billion via two transactions.

The top two India targeted deals were Reliance Industries' 25 per cent stake acquisition in Reliance Petroleum for $1,688 million and Quippo Telecom Infrastructure's 49 per cent stake acquisition in Wireless II Infoservices for $1296 million.