Foreign companies acquired majority stakes in 131 Indian companies during 2011, registering a 30% rise in such transactions as compared to the previous year, according to a study by Venture Intelligence, a research service focused on Private Equity and M&A transaction activity in India.
Of these Inbounds deals, there were 65 deals with an announced value of USD9.99 billion. In comparison, 2010 had witnessed a total of 101 inbound deals, of which, there were 50 transactions with announced values totaling almost USD8.4 billion.
The largest inbound M&A deal by value announced during 2011 was Vodafone’s March 2011 buyout of the Essar Group’s stake in mobile phone services firm Vodafone Essar for USD5.46 billion. The second largest inbound deal during the year was the acquisition of BPO firm Intelenet by UK’s Serco Group for an estimated USD630 million, followed by International Paper’s acquisition of a 75% stake in publicly listed Andhra Pradesh Paper Mills for USD388 million. US-based companies, followed by English and Japanese firms, were the leading acquirers of Indian companies during 2011, the Venture Intelligence data showed.
The volume of outbound deals – i.e., Indian companies acquiring overseas companies/assets – dipped by about 35% year-on-year to 127 deals in 2011 compared to 194 such transactions in the previous year. Among these, there were 62 deals with an announced value of USD9.9 billion (against 104 such deals worth USD23.7 billion during 2010). In the largest outbound deal, Mundra Port & SEZ acquired the Abbot Point Coal Terminal in Queensland, Australia for USD2 billion. In another major outbound acquisition GVK Power & Infrastructure acquired various Australia-based coal mines from the Hancock Group for USD1,260 million.
The domestic segment witnessed 333 deals during 2011, compared to 337 such deals during 2010. Of these, there were 108 deals with an announced value of USD6.1 billion during 2011 compared to 142 deals worth USD34 billion during 2010.
Overall during 2011, Indian companies were involved in a total of 591 M&A deals, including both cross-border and domestic transactions. Of these, 235 deals whose announcements included the transaction value, totalled USD26 billion (USD25,919 million). The volume of transactions was lower when compared to 2010, which witnessed a total of 632 M&A deals (including 296 deals with an announced value of USD66.4 billion). Median deal values in both outbound and inbound deals rose sharply during 2011, while that in the domestic segment remained flat.
Led by Aditya Birla Group’s acquisition of a controlling 67% stake in Columbian Chemicals for USD875 million, Manufacturing companies emerged as the most active dealmakers (including both cross-border and domestic deals) during 2011. Some of the other top deals in this industry included Hero Group buyout of Honda from their 2-wheeler Joint Venture (for USD854 million), Essar Group acquiring Zimbabwe Iron and Steel Corporation (USD750 million), International Paper acquiring Andhra Paper Mills (USD388 million) and MAN Truck and Bus’ buyout of its Indian JV partner in MAN Force Trucks (USD202 million).
Led by iGate Global Solution’s acquisition of Patni Computer Systems for USD1,200 million, the IT & ITES segment emerged as the second most active industry for deal making in 2010. Publicly listed Fortis Healthcare’s acquisition of two of its promoter owned entities – the international hospital chain Fortis International (for USD665 million) and diagnostics chain Super Religare Laboratories (for USD211 million) – dominated Healthcare & Life Sciences that emerged as the third most active industry during 2011.
