Friday, November 7, 2008

India's share in global M&A less than 1%

The merger and acquisition (M&A) spree of corporate India seems to have hit a low, as India's share in the global M&A tally, which touched a whopping $3 trillion, is less than even one per cent.

Till September this year, corporate India has announced merger and acquisition deals worth $26.43 billion, which is around 0.8 per cent of the total global M&A kitty.

Commenting on the current market situation, KPMG Executive Director (Corporate Finance Group) Gaurav Khungar said: "The environment is plagued with conservatism and a wait-and-watch approach with absence of decision making or aggression... And questions on prospective bankruptcy risks are abound."

Khungar further said beyond the economic factors that have contributed to lack of credit for M&A or business operations, all economic advise in the media is providing guidance to companies to hold on to their cash positions.

Another report from global consultancy major Grant Thornton showed the total number of M&A deals during the first nine months of 2008 stands at 381, with an announced value of $26.43 billion. In the corresponding period a year ago there were around 527 deals amounting to $49.33 billion.

Market experts said that the crisis in financial markets is acting as a dampener for M&A deals. Although, valuations of companies have gone down, banks are cutting down their exposure to funding deals.

 

Courtesy : www.business-standard.com

 

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