‘India may see uptick in M&A trend’

“This (uptick in M&A trend) will be spurred by reduced inflation and lowered interest rates at home while the cautiously improving US economy bodes well in terms of inbound American-interest from cash-rich companies,” Naik said.

A total of 244 deals with an aggregate value of USD 29.2 billion were announced last year,representing a 17 per cent drop in terms of number of deals and a 43.7 per cent decline in terms of deal value compared to 2010,the report said.

“While natural resource deals will continue to dominate the scene,albeit on a smaller scale,ongoing activity is expected to pick up in mid-market industrials and chemicals,technology and leisure sectors,” Naik said.

Interestingly,private equity acquisitions by US bidders leaped in 2011 as compared to 2010. US private equity-backed buyouts in India surged from USD 1.16 billion in 2010 to USD 2.01 billion in 2011.

“Looking at the total deal value in 2011,US PE firms slowed down their pace in acquiring Asia-Pacific businesses except those in India. US PE buyers’ strong interest in India is clearly demonstrated by the fact that buyouts by US PE firms in India surged by 73 per cent compared to 2010,whilst buyouts in the rest of Asia-Pacific fell by a significant 31.7 per cent,” the mergermarket report said.

Despite the mild drop in deal count,India’s energy,mining and utilities sector was the most active last year as the segment accounted for around 27.9 per cent of the country’s total M&A deal value.

The telecommunications sector,a sector that was most active in 2010 and second most active in 2009,saw a 70.5 per cent fall in deal value in 2011.

According to mergermarket,the industrial and chemicals sector will see the highest number of transactions in 2012,whilst M&A activity in the energy,mining and utilities will remain adequate.

Due to the overall drop in deals in the country,leaders on the financial advisor league tables recorded fall in deal volume and value.

Morgan Stanley with deals worth USD 14.5 billion under its belt and Ernst & Young with 14 transactions topped the rankings by deal value and volume,respectively.

Meanwhile,AZB & Partners,advising on USD 11.3 billion of deals and Desai & Diwanji,which advised on 48 transactions throughout the year,ranked top of the legal advisor league tables by deal value and volume,respectively.