According to a consulting firm PwC India: Annual Review And Outlook for 2020 report, Merger and acquisition (M&A) activity in India halved in value in 2019 as compared to 2018. As of December 2019, India got 765 deals worth $37 billion out of which only 11 deals are valued at over $1 billion each compared to 25 in 2018.
Crux of the Matter
India’s inbound activity totalled around $12 billion in 2019 as compared to 2018 which saw deals worth $22.4 billion. The major highlight of 2018 was the acquisition of Flipkart by Walmart Inc. at $16 billion.
The US-China trade war contributed to the slowdown in deal activity as investors have a cautious approach.
Despite the slowdown, M&A deals by foreign firms rose from 28% to 32% value this year.
The report said, “India has witnessed significant interest from overseas corporates across sectors including Steel, Energy, Infrastructure and Financial Services.”
On the private equity (PE) front, investors were seen chasing control transactions or buyouts, with such deals witnessing record-high activity this year.
The buyout activity surpassed the record of 2018 by 30% in value. There were 45 buyout deals totalling to $12 billion in 2019.
This suggests that investors are now more keen to play a role in the performance of their investments, to be able to extend their expertise and work towards the profitability of the company.
The report suggests that foreign players are evidently still bullish on India and eager to take part in the opportunities India presents despite the challenging situations. This also depends on both domestic and global volatility as well as government reforms.
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