M&A deal value fell 10% in 2017: Grant Thornton

Corporate India has exhibited a lower appetite for mergers and acquisitions so far this year, staying away from large ticket transactions, amidst uncertainty in the deal environment on account of economic reforms like GST (goods and services tax) and the bankruptcy code. There has been a decline of 21% in M&A deal volumes and 10% fall in deal value so far this year, according to a report by Grant Thornton, an advisory firm.

Till October, there have been 349 M&A deals worth $36.6 billion compared with 443 transactions worth $40.1 billion in the same period last year. October 2016 was market by several M&A deals including the acquisition of Essar Oil by Russia’s Rosneft, United Capital Partners and Trafigura Group Pte for $12.9 billion. There have been three deals in the billion-dollar category this year and 34 deals estimated and valued around $100 million compared to eight billion-dollar deals and 37 deals valued nearly $100 million in the first 10 months of 2016.

October 2017 witnessed IndusInd Bank’s merger with Bharat Financial Inclusion for $2.4 billion, marking the largest consolidation in the microfinance space in India.

“With India gaining 30 positions up on the Ease of Doing Business, the reforms around uplifting this ranking further, the effects of past reforms finally showing a positive impact on the economy and the stock market gradually ticking upwards, transactions should now start to inch upwards. While we will hopefully end 2017 on a high note, traction will perhaps be concentrated around core sectors,” said Prashant Mehra, Partner at Grant Thornton India LLP.

The overall deal activity (including M&A and private equity or PE) so far this year saw marginal increase of 3% in deal values recording deals worth $53 billion, while volumes declined by 24%  to 973 deals, amidst uncertainty in the deal environment on account of economic reforms like GST and the bankruptcy code.

Telecom, banking, e—commerce, energy and manufacturing sectors witnessed large deals in this year, contributing over 86% of total values, while volumes continued to be dominated by the start-up sector contributing 22% of volumes followed by IT & ITeS (17%).