India Inc goes shopping with 109 buyout deals

The consolidation in Indian corporate sector continues with almost 109 merger and acquisition deals reported in the first six months of 2004...

The consolidation in Indian corporate sector continues with almost 109 merger and acquisition deals reported in the first six months of 2004.

A report by management consultancy KPMG says merger and acquisition (M&A) deals have, however, slowed down by 8 per cent compared with last year. ‘‘These figures are below expectations given the optimism that surrounded the first quarter. At the start of the year, a more stable economic landscape and a rebound in the equity markets held the promise of increased M&A activity, but this is yet to materialise,’’ says KPMG Country Managing Director Ian Gomes.

‘‘While it is encouraging to see a flattening out in the value of completed activities, the drop in overall number of deals is a telling sign that recovery is still a way off,’’ Gomes said.

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The analysis shows a levelling out to the slide in global M&A activity witnessed since 2000, while Asia-Pacific region marked an upward trend.

The highest deal value in India of $378 million was by Hewlett Packard’s takeover of Digital Globalsoft, followed by the combined entity’s acquisition of HP India’s software business.

	Top M & A deals

	• $ 378 mn H-P buyout of Digital Globalsoft • $ 207 mn Reliance acquisition of Flag Telecom • Idea Cellular’s purchase of Escotel • Bharti’s acquisition of Hexacom • Hutch buying Aircel • Reliance taking over Trevira

In telecom, the major deals included Reliance’s acquisition of UK’s Flag Telecom, Idea Cellular’s purchase of Escotel and Bharti’s acquisition of Hexacom. Hutch’s acquisition of Aircel and Reliance’s buying Trevera, however, was not mentioned in the study.

The study shows that in the first half of 2003, M&A activities concentrated mainly in chemicals with 36 per cent, followed by telecom at 17 per cent, logistics at 14 per cent and oil and gas at 13 per cent.