M&A deal value plunges 55% to $6.2 bn in September quarter, says EY Report

Mumbai: Adopting a wait-and-watch approach towards big-ticket acquisitions amid the slowdown, M&A deal value has more than halved to $6.2 billion during the September quarter from $13.7 billion in the year-ago period, says a report. However, volume rose to 252 deals from 234 deals in the same period year-ago, according to an EY report. “In the last few months, a sense of caution has prevailed amongst investors and businesses. Companies essentially are on a wait-and-watch in pursuing big-ticket acquisitions,” EY partner and national leader for transaction advisory services Amit Khandelwal said on Tuesday. “But the market witnessed healthy activity in smaller value deals. Consequently, the quarter witnessed a fair increase in deal volume while deal value came down,” he added. [caption id=“attachment_4221379” align=“alignleft” width=“380”]  Representational image.[/caption] According to the report, the domestic deal activity remained stable in terms of volume, indicating that the local market remained the preferred destination for businesses. “Local M&A landscape was largely characterised by small-ticket deals essentially aimed to expand market share and most of such deals were witnessed in retail and consumer products, professional services, technology and media and entertainment sectors,” EY said. “Online players were popular targets across these deals, reflecting the companies thrust for digital transformation,” it added. Meanwhile, cross-border M&A activity remained muted during the quarter with total deal value declining 80.5 percent year-on-year, primarily led by lesser big-ticket inbound investments. During the quarter, inbound deal value came down to $441 million from $3.6 billion, while steady increase (6.4 percent) in inbound volume showed investors’ continuous focus on opportunistic acquisitions, the report said. “Outbound activity remained almost flat in terms of both volume and value (39 deals totaling to $304 million),” it added. Sector-wise, technology led the deal activity, both in terms of value and volume with 33 deals totaling to $3.8 billion, followed by financial services, recording 32 deals with a disclosed value of $291 million. Another sector which has been continuously evolving is professional services, wherein companies were seen making acquisitions for expansion. These acquisition also allowed them to explore new age digital channels to build capabilities in a disruptive environment, the report noted.