Global companies are increasingly looking at establishing a presence in India, as the inbound merger and acquisition (M&A) volume has swelled to $27.6 billion this year so far, a tad below the record year-to-date volume seen in 2007, says global deal tracking firm Dealogic.
According to Dealogic, India inbound M&A volume reached $27.6 billion year-to-date (YTD) — slightly behind the record YTD volume announced in 2007.
However, though there is an increase in the YTD inbound M&A volume, the third quarter of this year saw very little inflow.
“India inflow M&A volume totals $2.6 billion in 2011 in the third quarter so far, down 88 per cent from the record quarterly volume of $20.6 billion achieved in the first quarter of this year,” the report said.
Experts believe the surge in inbound deals has largely been due to the fact that a large number of global entities are trying to tap the bullish growth momentum of India and the country’s robust domestic consumption story.
The top five acquirer nations include the U.K., which accounted for 57 per cent of the inbound M&A, followed by the US (22 per cent), Germany (5 per cent), Japan and France (4 per cent), Dealogic said.
Acquirers from the UK have invested a total of $15.6 billion in Indian companies across all sectors so far this year, much more than the $526 million worth of deals announced in 2010 YTD, and stands as the highest YTD level on record, Dealogic said.
BP’s $9 billion acquisition of Reliance Industries’ oil & gas assets, was the deal that pushed the UK to this coveted position.
The deal stands as the largest inbound M&A in India so far this year and is also India’s second biggest inbound cross-border deal on record.
The other most prominent inbound deal so far this year also involved a UK entity — Vodafone Group — which acquired Essar’s stake in Vodafone Essar for $5 billion.
