Although cross-border mergers and acquisition (M&A) deals touched a new high during 2007, the value of domestic M&A deals was on the decline during the year, according to a study done by consultancy firm, Grant Thornton.
The value of domestic deals has declined from $6.9 billion in 2005 to $4.99 billion in 2006 and $2.83 billion in 2007, even though the volume of domestic deals has increased from 151 deals in 2005 to 214 deals in 2006 and 313 deals in 2007, the study said.
The number of domestic deals ~ where both acquirer and the target company are Indian ~ has gone up but they were of small value. According to Grant Thornton, total number of M&A deals during the year (up to 15 December) were 661 with an announced value of $51 billion. But 348 cross-border deals ~ Indian companies acquiring foreign companies and the reverse ~ accounted for bulk of the share at $48 billion.
Mr Harish HV, partner, corporate advisory services of Grant Thornton said, the possible dampener to domestic deals could be the Competition Bill which seeks to examine all large M&As. The definition of size is too narrow and the time-frame for response is too long. “There is a clear case for reviewing large deals which result in monopolies or significant concentration but not all deals fit that definition,” he said.
Source: The Statesman