2009 to offer significant M&A opportunities 21 Jan 2009, 1345 hrs IST, Saikat Das, ET Bureau MUMBAI: The

global financial tsunami has thwarted the robust growth of merger and acquisition and private equity investments in India. The total value of 766 deals (M&A and PE) announced during 2008 was $41.54 billion as against 1081 deals valued at $70.14 billion in 2007. "The year 2008 has presented both challenges and opportunities. History has taught us that economic and business cycles are inevitable. We feel that the year ahead (2009) will offer significant deal making opportunities to companies that innovate, consolidate and develop niche financing and non cash structures," said CG Srividya, partner, specialist advisory, Grant Thornton. Interestingly, outbound M&A deals saw substantial fall in value. Figures from Grant Thornton deal tracker show, there were 196 outbound deals valued at $13.19 billion in 2008 as against 243 deals valued at $32.76 billion in 2007. There were 86 inbound deals valued at $12.55 billion in the previous year as against 112 deals valued at $15.50 billion in the corresponding year. However, the contribution of inbound deals to total deal value in 2008 has increased despite a decline in overall cross border M&A value from 2007. Said K Subramanian, director, Deloitte Haskins and Sells, In 2007, money was chasing limited number of deals with an optimistic outlook. Valuations were forced to rise high. On the contrary, the year 2008 has witnessed considerable fall in valuations. Further, people were conserving money for future deals in a bullish market. Both the factors have affected outbound deals. Globally M&A deals worth $2.9 trillion were announced in 2008 as compared to $4.48 trillion in 2007 and $3.61 trillion during 2006, registering a fall of 35% between 2007 and 2008. The Indian M&A and PE stories reflects relatively better picture, indicates the Grant Thornton Deal Tracker report. Sector-wise, banking & financial services, IT & ITeS and telecom sectors were the top 3 domestic sectors in terms of value with deal values totaling $ 2.8 billion, $771 million and $688 million respectively for the year. In terms of volume, most of the domestic M&A transactions took place in the IT & ITeS (28 deals), media, entertainment & publishing (19 deals) and pharma, healthcare & biotech (17 deals).

Daiichi Sankyo picking up 60.63% in Ranbaxy Laboratories worth $ 4506.31 million; Oil & Natural Gas Corp Videsh acquiring 100% in Imperial Energy PLC worth $ 2,800.00 million; and NTT DOCOMO buying 26% in Tata Teleservices worth $2,700.00 million, were the three biggest transactions in the M&A space in 2008. Moreover, the total capital mobilised through IPO during 2008 was $4.51 billion as compared to $9.92 billion and $5.89 billion in 2007 and 2006 respectively. The number of IPOs during 2008 has also gone down, falling to 44 IPOs from 101 and 91 IPOs during 2007 and 2006 respectively. For IPOs, power and energy topped the list of sectors for 2008 with 74% of total capital raised which was followed by real estate & infrastructure management with 9%. In terms of number of IPOs, power & energy and real estate & infrastructure management led with 5 IPOs each. "With moderating inflation, lowering of interest rates, timely intervention by federal governments across the globe to provide financial stimulus, lowering of key commodity prices especially oil, we expect that the markets will resume their growth momentum globally and especially in emerging markets like India," commented Harish HV Partner, Grant Thornton. In 2009 banking sector is going witness a lot of consolidations with the new banking regulations around the corner, added Deloittes Subramanian. http://economictimes.indiatimes.com/Economy/2009_to_offer_significant_MampAs/artic leshow/4011187.cms