M&A deals jump 25 per cent in 2014 to near record-high at USD 37 billion
Mumbai: Overall deal activities hit near record-high in 2014 with the value of announced mergers & acquisitions involving domestic companies reaching USD 37 billion, a full 25.5 per cent jump over 2013. This is a little short of the record level of USD 37.6 billion worth deals closed in 2011.
The average M&A deal size for transactions climbed up to USD79.1 million in 2014 compared to USD 67.6 million in 2013 as more deals were announced valued above USD 500 million, according to Thomson Reuters/ Freeman Consulting data. However, total cross-board M&As dropped a massive 39.2 per cent to USD 13.9 billion compared to 2013 as both inbound and outbound activities declined.
Inbound M&As fell 27.2 per cent, while outbound deals plunged 65 per cent. Completed M&As involving domestic companies totalled USD 25.7 billion, a 12.8 per cent decline over USD 29.4 billion in 2013. Domestic deals stood at USD 17.4 billion, up 245.7 per cent over a year ago-boosted by three deals above USD 1-billion, including Sun Pharma's pending acquisition of Ranbaxy Labs for USD 4.1 billion in a stock swap transaction.
This deal pushed the healthcare sector to capture 26.1 per cent of domestic activity, while on excluding the Sun-Ranbaxy deal, healthcare captured 17.2 per cent market share with a value of USD 6.4 billion, up 24.6 per cent from 2013, which is the highest since 2010 when it stood at USD 7.2 billion.
The technology, media, and telecoms sector came in second with an aggregate market share of 18.5 per cent as combined deal value rose 15.8 per cent to USD 6.9 billion from 2013. The energy & power sector followed next with 16.7 per cent of the market share with USD 6.2 billion worth of deals, down 8.9 per cent from 2013. Private equity-backed M&As rose 36.3 per cent in the reporting year at USD 3.4 billion, making it the highest annual period since 2011 when it stood at USD 4.6 billion.
This was driven by Canada Pension Plan Investment's acquisition of Kotak Mahindra Bank from Kotak Trustee Co. for a total value of USD 371.5 million. In addition, Canada Pension Plan Investment also agreed to acquire an undisclosed minority stake in L&T Infrastructure Development Projects from L&T for USD 322.2 million in a privately negotiated transaction.
However, inbound M&As were down 27.2 per cent to USD 11.3 billion in 2014, despite an 11.5 per cent increase in number of announced deals. Most of inbound deals were on consumer staples sector with deal value of USD 2.4 billion, despite a 35.7 per cent fall over 2013, capturing 21.5 per cent of all inbound deals followed by healthcare and energy & power with 13.2 and 12.6 per cent market share, respectively.
