India witnessed pending and completed M&A deals worth $82.3 billion in the second quarter of 2022, which is the highest-ever amount on record. It is more than twice the previous record of $38.1 billion recorded in the third quarter of 2019, according to a Bloomberg report. Globally, M&A volume in the quarter reached $827.6 billion, down 8.7 per cent from the same period in 2021.
HDFC Bank’s $60-billion all-stock acquisition of Housing Development Finance Corp (HDFC) in April pushed the overall merger and acquisition (M&A) to the record level. It was India’s most valuable bank and the largest mortgage lender in the country’s biggest-ever M&A transaction.
“While conglomerates will consolidate to become stronger and gain market share in their core sectors, there will be renewed or new initiatives around two big themes: ESG and digital. The second in particular is a focus for all companies, no matter the sector… There won’t be a strategy going forward that doesn’t provide a clear path to deliver this,” the report quoted Sonjoy Chatterjee, chairman and chief executive officer for Goldman Sachs Group in India, as saying. ESG stands for environment, social and governance.
Another deal in May involving the combination of software companies Mindtree Ltd and Larsen & Toubro Infotech in a $3.3-billion all-stock deal showed how India’s largest firms are positioning themselves for a changed landscape in technology, aided by volatility in the markets.
Billionaire Gautam Adani’s $10.5-billion acquisition of Ambuja Cements was also a significant deal to push India’s overall M&A tally.
“Companies in India leading the shift to renewable energy were among the biggest dealmakers. Shell Plc agreed to buy renewable power supplier Sprng Energy Pvt for $1.5 billion in April, while French oil giant TotalEnergies SE purchased a 25 per cent stake in Adani New Industries Ltd. this month. The firm plans to invest more than $50 billion in technologies such as green hydrogen over the next decade,” the report said.
Meanwhile, data and analytics company GlobalData said several key APAC markets witnessed a fall in deal activity. For instance, China, Japan, South Korea, Singapore, Indonesia, Malaysia and New Zealand experienced a decline in deal volume by 14.8 per cent, 42.7 per cent, 2.3 per cent, 9.9 per cent, 36.4 per cent, 40 per cent and 42.9 per cent, respectively, in May compared to the previous month. Meanwhile, markets such as India, Australia and Hong Kong emerged as notable exceptions with growth of 3.2 per cent, 15.2 per cent and 21.7 per cent, respectively.
It added that a total of 1,161 deals (comprising M&A, private equity, and venture financing deals) were announced in the overall Asia-Pacific (APAC) region during May 2022, which is a decline of 12.7 per cent over the 1,330 deals announced during the previous month.
An analysis of GlobalData’s Financial Deals Database reveals that this is the second consecutive month-on-month decline in deal activity in the region. Deal volume in the APAC region during the month was also lower than the monthly average of the first quarter of 2022.
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