M&As involving Indian cos touch $ 68.3 bn in 2010

Marking a robust year for deal activities, mergers and acquisitions (M&As) involving Indian companies trebled to $68.3 billion in 2010 as compared to the previous year, says global consultancy Ernst & Young.

Easy availability of finance as well as better economic prospects saw Indian players involved in as many as 1,267 M&A deals last year.

"For the year 2010, India's M&A deal value has reached a whopping $ 68.3 billion, having grown three-folds compared to the value recorded in 2009," E&Y said.

India recorded 554 cross border deals worth $ 54.9 billion - accounting for an 80 per cent share of 2010 total deal value. The average deal size last year rose to $ 120 million - "an all time high and more than three times compared to the average deal size of last year (2009)".

E&Y 's Partner and National Director (Transaction Advisory Services) Ranjan Biswas in a statement said that 2010 has been a blockbuster year for Indian M&A deals.

"The country's swift economic recovery, together with growth potential of Indian companies has triggered this deal activity, touching the peak levels of 2007," he added.

Moreover, E&Y noted that 2011 is also poised to be a significant year for Indian M&As and is likely to be dominated by outbound deals.

According to E&Y, the country in 2010 witnessed 263 outbound deals having an aggregate disclosed transaction value of $ 32.4 billion.

"The share of outbound deals in the total M&A pie in terms of value rose to 47 per cent in 2010 from a meagre 6 per cent a year ago," it said.

Most of the outbound deals involved companies from oil and gas, metals and mining sectors, as these players scouted for assets to match the growing energy needs. Bharti Airtel's buyout of Zain's Africa assets in a $ 10.7 billion deal and Adani group's acquisition of the Galiliee coal basin from Linc Energy for about $ 2.7 billion, were among the major outbound transactions in 2010.

In terms of deal value, natural resources followed by telecom were the top two sectors. Oil and gas (34 deals with an aggregate disclosed value of $ 19.4 billion) and metals and mining (70 deals with a value of $ 7.5 billion) together accounted for approximately 40 per cent of aggregate deal value in 2010," E&Y said.

The fast growing telecom sector saw transactions with an aggregate disclosed deal value of $ 14.1 billion.

E&Y pointed out that the higher deal value despite lower count of transactions was mainly on account of increased valuations in the domestic market.

"The year 2010 witnessed a total of 13 deals worth over a billion dollar each against just two such deals recorded in 2009," it added.