M&A deal activity in 2020 jumps 33 pc to USD 36.9 billion

Mumbai: Deals cut by Mukesh Ambani-led Reliance Industries helped overall merger and acquisition (M&A) activity grow 33 per cent in 2020 to USD 36.9 billion, a report said on Friday. The number of deals came down to 357 from the 443 in 2019, indicating a surge in average ticket sizes, the report by advisory firm Grant Thornton said. It pointed to the combined USD 10.1 billion stakebuy in Reliance Jio by Facebook and Google as an illustrative case.

The year also saw nine other deals value over USD 1 billion each, it said, adding that the top deals accounted for nearly two-thirds of the overall activity.

There were 35 deals of over USD 100 million but under USD 1 billion, down from 47 in the year ago period, it said.

Cross-border deal volumes fell 19 per cent compared with the previous year but the deal values jumped two times over 2019 to USD 21 billion, it said.

Indian companies with strong balance sheets have shaken off the shock from the coronavirus pandemic to chase overseas acquisitions, coming back strong after recording the lowest quarterly deal volumes in the second quarter of 2020 since 2011, it said.

Cross-border transactions between India and the US dominated in both the inbound and outbound segments. They together totalled 31 per cent of cross-border transaction aggregating to USD 15 billion, and was followed by Japan and UK which dominated the inbound and outbound volumes, respectively.

Overseas acquisitions from India were spread over 29 countries; of which, 29 transactions aggregating to USD 2.4 billion were executed in the US majorly in the information technology sector, it said.

Private equity investment values stood at USD 40.2 billion in 2020, marking the highest yearly values witnessed in any given year since 2011, it said. The attributed it to USD 9.8 billion funding raised by Reliance's Jio platforms and USD 6.4 billion investment raised by Reliance Retail Ventures.

There were 26 fundraises via qualified institutional placement (QIP) at USD 10.4 billion, again the highest since 2011, it said, pointing to transactions like Bharti Airtel, ICICI Bank, Axis Bank and Kotak Bank.

Eighteen companies raised USD 6.5 billion via Initial Public Offering (IPO), a 2.5 times increase in issue size over 2019, with top three public offerings being Yes Bank, SBI Cards and Payment Services and Gland Pharma.

From an outlook perspective, it said there is a scope for more deals in 2021.