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M&A activity falls 19 pc in H1

Our Bureau

NEW DELHI, June 25

AFFECTED by a sluggish global environment, India, like the rest of the world, saw a decline in mergers and acquisitions (M&A) during the first half of 2002.

According to a report prepared by consultancy firm KPMG, during the current year (up to June 2002), India witnessed deals aggregating $2.4 billion (Rs 11,760 crore ) as against $2.98 billion (Rs 14,602 crore) in the half year 2001. However, this reduction of 19 per cent was better than the average fall of 56 per cent in global M&A deals in the same period.

Meanwhile, the top five M&A deals in India were dominated by the financial services sector. M&A activity during the first half of 2002 in India was also primarily driven by domestic deals; of the 148 deals concluded, 54 per cent (80 in number) represented domestic deals while the rest were cross-border.

In terms of region, European deals were the highest in number (24) amongst India's cross-border deals, which numbered 68. Switzerland and the UK both led the way for most of the European M&A activity and were principally bidders for Indian targets.

Meanwhile, for cross-border deals in India, the US led the way with 19 deals (primarily in software and financial services), followed by the UK with six deals.

Internationally, the total value of global M&A deals fell from $1,020 billion in the first half of 2001 to $448 billion for the half year to date.

The Asia Pacific region took the biggest value drop (76 per cent) compared to last year, followed by the US, which fell 61 per cent by value. Western European M&A values fared better at 49 per cent below the first half of last year.

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