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M&A deal activity in 2020 jumps 33 pc to US$ 36.9 bn

IBEF:  February 15, 2021

Total merger and acquisition (M&A) operation in 2020 reached at US$ 36.9 billion, increased by 33% YoY, due to deals cut by Reliance Industries according to a report by advisory firm Grant Thornton.

As per the report, from 443 in 2019, the number of deals decreased to 357, reflecting an increase in average ticket sizes. It referred to Facebook and Google's joint US$ 10.1 billion stake purchase in Reliance Jio as an illustrative example.

2020 witnessed nine other transactions, each worth more than US$ 1 billion. Almost two-thirds of the total transaction accounted for the top deals.

The deal values in 2020 soared to US$ 21 billion two times over 2019.

In both the inbound and outbound segments, cross-border transactions between India and the USA dominated. Together, they accounted for 31% of cross-border transactions totalling US$ 15 billion, followed by Japan and the UK.

India's overseas acquisitions were spread across 29 countries, of which 29 transactions totalling US$ 2.4 billion were carried out in the US, primarily in the IT market.

Investment values in private equity stood at US$ 40.2 billion in 2020, the highest annual value observed since 2011.

As per the report, through eligible institutional placement (QIP), there were 26 fundraises at US$ 10.4 billion, again the highest since 2011, referring to transactions such as Bharti Airtel, ICICI Bank, Axis Bank and Kotak Bank.

Through Initial Public Offering (IPO), eighteen businesses raised US$ 6.5 billion, a 2.5-fold increase in issue size over 2019, with Yes Bank, SBI Cards and Payment Services and Gland Pharma becoming the top three public offerings.

The report added that there is a potential for further deals in 2021.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.