Singapore based companies have sealed 17 Merger and Acquisition deals with various Indian enterprises worth $940 million in the first half of 2016, a global valuation services firm has recently remarked.
Cross-border M&A deals represent a healthy percentage of all deals. The Indian market has gained significant traction with M&A activity during the first six months of this year.
Almost all of them were transactions where the acquirer is from Singapore and the target from India.
said Duff & Phelps Managing Director Srividya Gopalakrishnan.
The combined investment of $940 million made by the Singaporean firms saw some big deals. Prominent examples include Government Investment Corporation’s (GIC) acquisition of stakes in Viviana Mall, Greenko Energy and Bandhan Bank and Singapore Technologies Telemedia’s acquisition of controlling stake in Tata Communications Data Centre business.
There were four M&A deals worth $95 million between Malaysian and Indonesian companies and Indian enterprises, the consultancy said in its report ‘Transaction Trail’ released this week on mergers, acquisitions, private equity deals and initial public offerings in Singapore, Malaysia and Indonesia. The four M&As included Malaysia’s Tenaga Nasional Berhad (TNB) 30 per cent stake in GMR Energy Ltd Energy.
Some of the above stake acquisitions are by investment funds. As any other investors, their drive is to make good return on their investments. India has been a key destination for inbound M&As (foreign companies acquiring Indian businesses) over the years across different segments.
India offers a huge domestic market for local consumption. It also offers several capabilities and benefits for export-oriented units including but not limited to technology and manufacturing set ups, Gopalakrishnan highlighted. “International companies have managed to successfully make acquisitions or enter into joint ventures in India. M&A has been one of the ways in which they have expanded their India footprint,” she said.
Gopalkrishnan further told that many companies do not view M&A as something remarkable but they it is a strategy relevant for their day-to-day business. Growth rates in developing countries and modest growth rates in mature markets are plummeting which makes inorganic opportunities critical for sustenance. This helps companies to expand their business on an international scale, add on service offerings, leverage on global capabilities and mitigate their own shortcomings.