M&A activity slows down in Aug to $4.2 billion

India Inc's merger and acquisition activity seems to be fading as the month of August was the leanest since September 2009 with total deal volume of $4.2 billion.

According to the research firm VCCEdge, August saw the lowest deals in the last 11 months which could be much better if "Vedanta's proposed $9.6 billion deal for Cairn India would have gone through."

"March and June 2010 had seen some large deals which resulted in deal value greater than $14 billion during these two months. August was much lower in comparison," it added.

In July this year, the total value of M&A deals was about $5.4 billion. However, merger and acquisition activity in August this year zoomed over seven fold compared to the same month last year when only deals worth $629 million took place, the report noted.

For the year so far, total merger and acquisition deal value stands at $54 billion. Besides, there has also been a smart jump in the number of deals to 58 in the month against 34 in the year-ago period.

The period saw as many as 10 domestic deals worth $442 million, compared to 8 deals valued $39 million in the year-ago period. VCCEdge report noted that energy, industrials and consumer discretionary were the most targeted sectors in the month with deals worth $3.10 billion, $325 million and $310 million respectively.

Adani Enterprise's acquisition of the coal assets of Linc Energy for $2.7 billion was the biggest buy-out of the month, accounting for more than half of the total deal value followed by two buyouts made by Reliance Industries.

The country's most valued firm RIL purchased Shale acreage in central and north east Pennsylvania for $392 million and also marked its entry into the hospitality sector with the acquisition of 14.12 per cent stake in the promoter of Oberoi Group of hotels and resorts, EIH for $220 million, the report pointed out.

 The top five deals alone accounted for 85 per cent of total M&A deal activity in August 2010, VCCEdge said.