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April 20, 2009

M&A activity declines 60% during Q1 2009

During the first quarter of 2009, Indian companies were involved in a total of 54 M&A deals - including both cross-border and domestic transactions - compared to 135 deals during the same quarter in 2008 and 89 such deals during immediate previous quarter, according to a study by Venture Intelligence, a leading research service focused on Private Equity and M&A transaction activity in India.

Q1 ’09 witnessed 26 deals with an announced value of $4.6 billion, the Venture Intelligence study revealed. There were 15 inbound and outbound deals each with the rest being domestic acquisitions. Manufacturing was the most active industry with ten deals followed by IT & ITES with seven deals. Healthcare & Life Sciences, Food & Beverages, Telecom and Agri-business were the other industries that witnessed significant M&A activity in Q1 ‘09.

The largest inbound deal saw France-based stationery manufacturer BIC acquiring a 40% stake in Mumbai-based stationery products maker Cello Pens for about $160 million (Rs. 800 crore). Other notable inbound deals included American Tower Corporation acquiring the XCEL Telecom, Mylan Labs acquiring residual stake in Matrix Laboratories and Sodexo’s acquisition of Radhakrishna Hospitality Services Group.

Q1’09 also saw Indian companies aiming to close out on their acquisitions of global energy / commodities assets. Notable deals in this category included ONGC Videsh’s closing out on the acquisition of UK-based Imperial Energy for $1.9 billion and Sterlite Industries’ new bid for US-based copper mining firm Asarco at a renegotiated value of $1.7 billion.

The largest domestic M&A deal during the period was Reliance Industries’ acquisition of group company Reliance Petroleum. In other domestic deals, Private Equity-backed Nuzhiveedu Seeds acquired a 51% stake in two seed companies during the period - Yaaganti Seeds and Pravardhan Seeds.

About Venture Intelligence
Venture Intelligence, a division of Chennai-based TSJ Media Pvt. Ltd., is the leading source of information on private equity and M&A transactions in India. For more information, please visit