M&A in India to touch $17 bn

On the back of $7 billion worth mergers and acquisitions in the first half of 2005, industry chamber Assocham has predicted that the M&A activity in India would touch a whopping $17 billion this year.

The Assocham Eco Pulse study said the major chunk of the deals would be driven by banking, pharma, IT and ITeS, media and telecom sectors.

The study said deals worth $6.9 billion were signed in the first half of the current fiscal, against $5.2 billion in the whole of 2004.

"Companies are today sitting on huge reserves of cash, which is enabling them to achieve their merger plans, thanks to the robust capital markets and comfortable liquidity position," Anil K Agarwal, Assocham president said in a statement.

The industry chamber was of the view that boom in the financial markets, rising stock prices, persistently low interest rates and the overall economic resurgence would combine together in driving the M&A activity across these sectors, many of which would see further consolidation.

The chamber said mergers in the pharmaceutical sector provides opportunity in the generic market segment, which would lead for growing number of deals in the sector, besides survival in the competitive arena.

"Drugs worth over $80 billion are going off patent within two years' time and Indian companies are vying for global partners for gaining access to newer markets like Europe," Assocham study said.