edition 23 transactions quarterly - building a better … bharti airtel ltd. india 659...

Edition 23

Transactions QuarterlyA perspective on the Indian transactions market

January - March 2016

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Edition 23

January-March 2016

In this edition

Foreword ................................................................3

Mergers and Acquisitions (M&A) ..............................4

Key sector highlights ...............................................8

Cross-border activity .............................................11

Global M&A activity ...............................................12

Outlook ................................................................14

Transactions Quarterly –1Q

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Welcome to the 23rd edition of Transactions Quarterly — our quarterly review of India’s M&A landscape.

The global economic scenario remained challenged owing to the concerns around Brexit and slowdown in China. On the other hand, the macroeconomic indicators were much more positive closer home in India. The quarter ending March was encouraging for the Indian economy with a further strengthening of the manufacturing sector. The key indexes depicted an increase in industrial expansion for all

three months of the quarter, reflecting the strong focus on driving growth in the manufacturing sector.

Economic tailwinds positively impacted the M&A activity in India. The past quarter saw M&A activity remaining upbeat, with both deal volume and value increasing significantly when compared to the same quarter last year. The deal momentum was more pronounced on the domestic front, owing to Indian corporates’ focus on gaining economies of scale. However, cross-border activty witnessed a marginal deceleration during the quarter, due to relatively lower inbound and stable outbound deals as compared to 1Q15.

From a sector perspective, technology continued to lead deal activity, driven by companies’ focus on expanding their services portfolio across IT consulting and emerging technologies, such as analytics and cloud software services. The cement industry witnessed two large deals in the quarter, stemming from the companies’ emphasis on deleveraging their balance sheets. This trend finds itself mirrored in the recent edition of the EY Capital Confidence Barometer (CCB) with 45% of the Indian respondents expecting distressed asset sales to assume increased prominence in the near-future.

The government’s resolve to carry out policy reforms in the manufacturing and infrastructure sectors should help revive private investment, thereby creating opportunities for both domestic and overseas companies. An easing of monetary policy and an overall positive economic outlook should further augment the deal momentum in the near-term.

Fore

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Amit Khandelwal Partner and National Director, Transaction Advisory Services, Ernst & Young LLP

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The technology sector continued to dominate the deal volume with 33 deals (with a total disclosed value of US$557 million), as companies across the technology services segment remained focused on augmenting capabilities in emerging technologies with the aim to remain relevant to their clients’ emerging technology needs. The infrastructure sector followed with 32 deals valued at US$746 million.

On the other hand, cross border activity during the quarter witnessed a similar performance as seen in the first quarter of 2015. The deal volume, with 96 deals, was marginally low as compared to 101 deals seen in 1Q15, whereas the deal value remained unchanged at US$2.5 billion. While we witnessed a relatively slower inbound activity, outbound deals posted a better performance comparatively.

India M&A highlights

Domestic M&A landscape witnesses upbeat deal activity in 1Q16M&A activity involving Indian companies remained buoyant during the quarter ending March 2016. The quarter recorded 245 deals with a total disclosed deal value of US$7.8 billion. While the deal count witnessed a growth of 12% over the corresponding quarter last year (219 deals), the aggregate disclosed deal value recorded a significant increase of 63%, compared to US$4.8 billion in 1Q15. This increase in value was mainly due to the rise in big-ticket domestic deals.

Domestic activity dominated the Indian M&A space in this quarter, with 149 deals accounting for an aggregate disclosed deal value of US$5.2 billion. While the deal volume grew by 27% (118 deals), the total disclosed value more than doubled compared to the US$2.3 billion value in 1Q15. This increase in domestic deal value was primarily attributed to the quarter’s two largest divestment deals; Jaiprakash Associated Limited entered into an agreement to sell six of its cement units to UltraTech Limited., for US$2.4 billion and Reliance Infra agreed to sell its cement division to Birla Corp Limited for US$710.7 million. Both of these deals were driven by the need to deleverage their balance sheets to reduce debts.

Exhibit 1: Quarterly transaction activity in India

Source: EY Analysis and ThomsonONE dataNote: Deals taken as per announced date. Includes mergers, acquisitions, divestments, spin-offsand JVs. Private equity (PE) deals are excluded.

10.5

5.4 7.9

2.7

11.6

6.6 8.5

4.8 6.5

8.7 7.0 7.8

191 166 163

202 221 231 216 219 235

259 258 245

2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16

Deal value (US$ b) Deal count

Deal size composition

Source: EY Analysis and ThomsonONE data

66% 64% 65% 62% 60%

20% 21% 20% 23% 27%

9% 9% 7% 8% 7%5% 6% 8% 7% 6%

1Q15 2Q15 3Q15 4Q15 1Q16

Deal size ranges (US$ m)

Undisclosed 0-20 20-100 Above 100

Average deal size

Average deal sizefor all deals

US$82m

Average deal size for deals below US$100m

US$15m

An increase over 1Q15’s average deal

size of US$65m

A decrease from 1Q15’s average deal

size of US$18m


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India M&A snapshot in 1Q16

Deal Date Target Target nation

Acquirer Acquirer nation

Value (US$ m)

Sector

Domestic 28-02-2016 Jaiprakash Associates Ltd. (six cement units)

India UltraTech Cement Ltd.

India 2,401 Cement and building products

Domestic 04-02-2016 Reliance Cement Co. Pvt. Ltd.

India Birla Corp. Ltd. India 711 Cement and building products

Domestic 17-03-2016 Videocon Telecommunications Ltd. (2 x 5 MHz spectrum)

India Bharti Airtel Ltd. India 659 Telecommunications

Outbound 11-02-2016 HealthPlan Holdings Inc. US Wipro Ltd. India 460 Technology

Inbound 04-03-2016 Siemens Ltd. (healthcare unit)

India Siemens Healthcare Pvt Ltd.

Germany 455 Healthcare

Inbound 28-03-2016 Bangalore International Airport Ltd.

India FIH Mauritius Investments Ltd.

Canada 322 Infrastructure

Outbound 29-03-2016 Novartis Ag. (14 prescription brands)

Japan Sun Pharmaceutical Industries Ltd.

India 293 Pharmaceuticals

Inbound 23-02-2016 ibibo Web Pvt. Ltd. India Naspers Ltd. South Africa

250 Travel Services

Domestic 17-02-2016 Dr. Reddy’s Laboratories Ltd. India Dr. Reddy’s Laboratories Ltd.

India 229 Pharmaceuticals

Inbound 07-01-2016 MakeMyTrip Ltd. India Ctrip.com International Ltd.

China 180 Travel Services

Domestic Inbound Outbound Total

1Q15 118 65 36 219

2Q15 139 56 40 235

3Q15 139 86 34 259

4Q15 150 71 37 258

1Q16 149 47 49 245

Domestic Inbound Outbound Total

1Q15 2.3 2.1 0.3 4.82Q15 5.2 0.9 0.5 6.53Q15 1.9 3.2 3.6 8.74Q15 2.1 4.0 0.8 7.01Q16 5.2 1.3 1.2 7.8

Deal type composition

Top 10 deals involving Indian companies

Deal count Deal value (US$ b)

Source: EY analysis of ThomsonONE data


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Developing your growth strategy involves choosing the right acquisitions to complement your organic growth. ey.com/tas #BetterQuestions

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Key sector highlights

*Sectors mentioned in the descending order of deal volume

1Q16 Vs 1Q15 change indicator Increase Decrease

Technology Pharmaceuticals

Chemicals

Diversified industrial products

Others

Media and entertainment

Cement and building products

33 deals 13 deals

12 deals

10 deals

8 deals

15 deals 75 deals

US$557m US$593m

US$177m

US$21m

US$3,295m

US$43m US$2,096m

Retail and consumer products

16 deals

US$146m

Financial services31 deals

US$84m

Infrastructure32 deals

US$746m

solutions business in Latin America and adds plethora of new customers, such as, Telefonica, Claro, AT&T, Nextel, Entel, TIM, Viivo and Oi, to Comviva’s existing customer portfolio in the LATAM market. Furthermore, Kellton Tech Solutions Limited acquired US-based Bokanyi Consulting for an undisclosed amount, to strengthen its cloud and analytics service capabilities.

Over the last several quarters, almost all the large Indian technology players are on an acquisition spree, specifically in the big data analytics and cloud service segments. The same trend is expected to continue in the coming quarter. In addition, with the increased penetration of mobile applications in the consumer and enterprise spaces, technology players would focus on further strengthening their mobility capabilities by acquiring mobile application players. This will provide large companies the access to technology and talent pool, and the small and boutique players an attractive exit along with scale, visibility and experience of their large counterparts.

Technology sector led the country’s M&A activity in terms of deal volume in 1Q16; recording 33 deals accounting for a cumulative disclosed value of US$557 million.

During the quarter, Wipro made the second largest acquisition in its history, by acquiring HealthPlan Services, a US-based healthcare technology solution provider, for US$460 million to strengthen its consulting service position in the healthcare and life sciences business. This is the latest in the string of acquisitions that Wipro has started, since the last quarter of 2015 and the first and a major one since the new CEO took over.

IT consulting (13 deals; US$512 million) was the main focus within the technology space, which was followed by the software

Technologyservices segment (ten deals; US$13 million). Emerging technologies such as analytics and cloud software services (which are a part of social media, mobile, analytics and cloud offering and also known as SMAC), continued to attract attention during the quarter. Of late, SMAC has been the most sought after in the technology sector, indicating growing prominence of new technologies in business operations. Both, the technology and non-technology companies are increasingly using these applications to enhance their service portfolio and capabilities. Also, the increasing number of deals in this space, reinforces that inorganic route is the most preferred way of tapping these opportunities. Mindtree Limited acquired US-based salesforce partner company, Magnet 360, for US$50 million, to strengthen its digital services and marketing cloud offerings.

Mahindra Comviva acquired a majority stake in Advanced Technology Solutions (ATS), an Argentina-based mobile VAS company. This deal further strengthens Comviva’s already leading mobility

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Cadila Healthcare has been the most active acquirer in the domestic market this quarter. Firstly, Cadila acquired selected animal health brands from Zoetis, along with a manufacturing facility in Haridwar, for US$29 million. The acquisition is expected to strengthen Cadila’s animal health portfolio in India, specifically in the livestock farm care product division. Cadila also announced the acquisition of a gastro-intestinal brand Actibile, for a consideration of US$8 million from the listed Indian pharma company Albert David Limited. In addition, SeQuent Scientific Limited, promoted by the founder of Strides Arcolab, acquired a majority stake in Indo Phyto Chemicals Private Limited. Though this deal, SeQuent will get access to 14 bulk drugs (which are already in production) and 20 drugs under development, which will boost the company’s presence in the female healthcare space with steroids and hormonal bulk drugs.

Pharmaceutical sector recorded 13 deals accounting for a cumulative disclosed value of over US$593 million during 1Q16.

The largest deal announced in this quarter was Sun Pharma’s US$293 million acquisition of 14 established prescription brands from Novartis in Japan. As per the company’s disclosure, these products have a combined revenue of ~US$160 million per annum. This acquisition marks the entry of Sun Pharma in the strategically important Japanese market.

Indian pharmaceutical players continued their quest for overseas expansion

Pharmaceuticalsin 1Q16 with a view to increase their customer base, expand their distribution network and gain access to new markets, products and technologies. Besides the Sun Pharma deal, Strides Shasun acquired a 51% stake in Australia-based Generic Partners for US$17.7 million, through its Australia-based subsidiary, Arrow Pharmaceuticals Pty Ltd. Through this deal, Strides Sashun will gain immediate access to marketing authorization of 47 drugs, along with 22 pending registrations and a pipeline of 32 molecules, which will make it the second largest generic pharmaceutical company in Australia. Strides also acquired a majority stake in Kenya-based Universal Corporation for US$14 million, to gain a foothold in the fast growing East African pharmaceuticals markets. Though we have seen Indian companies making acquisitions in Japan and Australia in the past, this is the first time that an Indian company has made an acquisition in Kenya.

Retail and consumer products

The retail and consumer products sector clocked 16 deals with a total disclosed deal value of US$146 million in 1Q16. The majority of the deals (ten) were domestic in nature. During the quarter, online retailing was the most active sub-sector (five deals with total disclosed value of US$28.5 million), followed by personal care and home care (four deals).

The largest deal of this sector during the quarter was Zee Media Corporation’s acquisition of a majority (80%) stake in India Today Group’s e-commerce company,

Today Merchandise Private Limited for US$24.1 million, which runs the online shopping platform “bagittoday.com”. This deal marks Zee Media Corporation’s entry into the e-commerce space. M&A in the online retail space continued its momentum seen in 2015 into the first quarter of 2016, driven by the players’ focus to increase scale and expansion in their product portfolios. As the domestic e-commerce sector grows on the back of increased internet penetration, both e-retailers and traditional brick and mortar players are increasingly expanding online operations through inorganic routes. For example, we saw Godrej & Boyce Manufacturing Co. Limited acquiring a majority stake in home decor and accessories firm India Circus for an undisclosed amount to strengthen its lifestyle product offering by increasing its online presence. Furthermore, a large number of e-retailers (primarily in the

apparel, jewellery and home furnishing space) are also increasingly adopting a hybrid retail model, with both online and offline presence. This will not only increase brand presence and credibility for these brands, but also improve customer experience and engagement.

That said fund raising from investors has become increasingly difficult as investors are now turning their focus on value rather than only scale, putting pressure on online retailers to cut costs and focus on the bottom line. In addition, we expect investors to consolidate their investments in the same set of e-commerce companies in which they are the largest stakeholders, acting as a catalyst for further consolidation. Furthermore, the recent policy measure to allow 100% FDI in e-retail will open the window for cash-rich foreign e-retail players to strengthen their presence by acquiring Indian e-retailers.


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This quarter also witnessed cash-rich domestic companies acquiring assets overseas to expand internationally. For example, Godrej Consumer Products Ltd. acquired Canon Chemicals, a Kenya-based manufacturer and distributor of personal care and home care products, to further expand its presence in the African market. Indian players are also making acquisitions domestically to expand their businesses and serve a larger market, on the back of improved demand for home care products

from a rising middle class. For example, Borosil Glass Works Ltd. acquired Hopewell Tableware Pvt. Ltd. for US$4 million to enter the opal dinnerware market from being a tableware manufacturer of glass and melamine.

With the increase in disposable income and rapid urbanization, Indian consumers’ consumption of food and beverages and personal care items has also increased rapidly. Thus, to capture this expanding

opportunity and to counter increasing competition from relatively new players, established Indian companies will keep looking for acquisition targets, domestically. Simultaneously, large companies will likely accelerate exploring acquisition targets in new markets overseas, such as South East Asia, Middle East, and Africa to expand their geographical presence and broaden their product range.

Hospitality

The hospitality and leisure industry in the country recorded six deals with a total disclosed deal value of US$53 million in 1Q16. A majority of the deals were in the hotels and resorts segment, which continued to be a hotbed for M&A action on the back of increasing demand by corporates, matched by more realistic valuations. Domestic consolidation dominated the M&A activity, both in volume and value terms (five deals contributing US$53 million) in 1Q16.

SAMHI Hotels Private Limited (a Gurgaon-based hotel investment and development company) acquired Ascent Hotels Pvt. Ltd. for US$51.6 million. Ascent Hotels owns the 220 room Hyatt Regency hotel and 102 luxury service apartments of the same brand. Through this acquisition, SAMHI Hotels further expanded its

presence in Pune, reinforcing the high growth potential of the city for luxury hotels and apartments. Building on the trend witnessed in 2015, we continued to witness investor interest in the hotel and resorts segment in 1Q16 on the back of a growing tourism sector on the one hand and a strong growth in corporate demand on the other. Relatively lower valuation as compared to the past few years is also providing a boost to M&A activity in the industry, reflected in the SAMHI Hotels–Ascent Hotels deal.

In another deal, Warren Tea Limited acquired Maple Hotels & Resorts Limited (which runs three boutique luxury hotels in Jaipur) for US$1.2 million to make it a wholly owned subsidiary. Additionally, Indian players are not shying away from capturing the growth potential overseas. For example, Mahindra Holidays and Resorts acquired a 100% stake in Finland-based Saimaa Gardens Arena Oy for an undisclosed amount to further strengthen its presence in the Scandinavian market. In the budget category, groups like IHCL are now focusing on the asset-light model with attention towards both metros and leisure destinations.

While the global hospitality market is witnessing consolidation as a reactive measure to the disruption created by market aggregators, the same has not impacted the big players in the Indian scenario yet. While Accor has acquired FRHI, Marriott is in the process of finalizing its acquisition of Starwood. With a few other players also on the block, the global market would witness increased activity in this space. While this may lead to a few assets changing flags, the impact is likely to be subdued from an Indian standpoint.

Nonetheless, several initiatives by the government such as the open skies policy, e-tourist visa and visa on arrival will also provide an additional fillip to the country’s hospitality industry, cementing India’s place as a preferred tourist destination. All this will likely fuel the demand for more rooms by hotels and resorts. Thus, to capitalize on this market potential, Indian players will continue to focus on the inorganic route to rapidly add capacity and to venture into new geographies.

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Cross-border activity


• Cross-border activity involving Indian companies was marginally lower in 1Q16 as compared to 1Q15. While the deal volume marginally declined to 96 from 101, the deal value remained unchanged for the quarter at US$2.5 billion.

• This decline in volume was on account of a reduction in the inbound deal activity. There were 47 inbound deals during the quarter, which contributed US$1.3 billion to the disclosed deal value as compared to 65 deals accounting for US$2.1 billion in 1Q15. The US continued to top the inbound volume with 10 deals. The media and entertainment sector led the inbound activity during the quarter with six deals contributing for US$21 million, followed by technology sector with five deals.

• On the other hand, outbound activity witnessed a healthier performance comparatively, both in terms of deal value and volume. Total deal value almost quadrupled to US$1.2 billion from US$328 million in 1Q15, whereas outbound volume jumped to 49 deals from 36 deals seen in 1Q15. The US remained the favourite destination for Indian corporates with 15 deals valued at US$514 million, which was 44% of the total outbound deal value. Technology continued to drive outbound activity with 14 deals amounting to US$537 million (46% of the total deal value) during the quarter, followed by the pharmaceuticals sector, with five deals accounting for US$325 million. The largest outbound deal was the acquisition of the US-based HealthPlan Holdings Inc. by Wipro Limitedfor US$460 million.

Cross-border M&A activity softened in 1Q16

Outbound

Inbound

Both inbound and outbound

Only inbound or outbound

Deal flow

USInbound: 10 deals, undisclosedOutbound: 15 deals, US$514 mn

UKInbound: 3 deals, undisclosedOutbound:4 deals, US$62 mn

AustraliaInbound: 2 deals, US$26 mnOutbound: 3 deals, US$20 mn

South AfricaInbound: 4 deals, US$256 mn

CanadaInbound:1 deal, US$322 mnOutbound: 1 deal, undisclosed value

JapanInbound: 4 deals, US$14 mnOutbound: 1 deals, US$293 mn



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Global M&A activity

Global M&A activity witnessed a slow start in 2016

• Global M&A activity slowed down in the first quarter of 2016, led by a relatively slow March and fewer mega-deals.

• The Americas region continued to lead the overall M&A activity both in terms of volume and value, followed by EMEIA.

Current state

• The year 2016 witnessed a slow start to global M&A activity with relatively lower total deal count and disclosed deal value in 1Q16 as compared to 1Q15. Total deal count stood at 8,757, down 10.7% as compared to 9,806 in 1Q15, and disclosed deal value declined by 20.6% y-o-y to US$671.3 billion from US$845.2 billion in 1Q15. In addition, the number of megadeals (valued at US$10 billion or more) also decreased to 7 from 13 in 1Q15. Increased market volatility and uncertainty around global economic growth significantly dampened the global M&A activity.

• Overall deal activity slowed down in March after witnessing first two months of strong performance during the quarter. Deal count in March

• The Americas region is expected to stay strong in transactions in the near-term, driven by continuous economic recovery in the US. Furthermore, amid slowing earnings domestically, corporations will seek opportunities overseas to effectively deploy large cash reserves and boost their growth. Moreover, there is a strong possibility of slower-than-expected Fed rate hikes in 2016, which will further add to the M&A activity in the near term.

• European markets should see a steady flow of M&A deals in 1H16, mostly inbound in nature. As the euro continues to remain weak against all major currencies globally, the Eurozone becomes an attractive target region for global corporations (especially the US and Chinese).

• There were a number of outbound deals initiated by China that were witnessed in 1Q16. This momentum should continue in the coming months, as the domestic slowdown in China will propel cash-rich Chinese enterprises to look outside to expand their businesses. This coupled with the stimulus support in China and a healthy economic outlook for India should induce strong M&A activity in the Asia-Pacific region through 1H16.

declined by 24% y-o-y to 2,675 as compared to 3,525 in March 2015, whereas, disclosed deal value declined nearly 46% to US$196.1 billion from US$365.4 billion.

• The Americas region contributed to the majority of the deal volume and the disclosed deal value — 3,144 deals accounting for US$275 billion — followed by EMEIA, with 3,066 deals valued at US$212 billion. The US continued to dominate the global M&A landscape, and accounted for 26% (2,347 deals) of the global M&A deal count and 35% (US$ 236.8 billion) of the global disclosed deal value.

• The technology sector led the M&A activity with 2,076 deals, followed by retail and consumer products with 1,102 deals and diversified industrial products with 779 deals. Additionally, the technology sector accounted for the maximum disclosed deal value at US$118.5 billion, followed by diversified industrial products at US$199.2 billion.

Outlook

• Global M&A activity is expected to gain momentum in the coming months, driven by accommodative monetary policies, as well as the fiscal and structural measures taken by governments and central banks.

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Americas Asia-Pacific** EMEIA* Total

Technology 9% 7% 7% 23%

Consumer products and retail

4% 4% 5% 13%

Diversified industrial products 2% 3% 3% 8%

Real estate 2% 2% 3% 7%

Life sciences 3% 2% 1% 6%

Automotive and transportation

1% 2% 2% 5%

Others 15% 11% 12% 38%

All sectors 36% 30% 34% 100%

Target Sector Nation Acquiror* Value (US$b)

Syngenta AG Chemicals China ChemChina 48.1

Tyco International PLC Technology US Johnson

Controls Inc. 16.6

London Stock Exchange Group PLC

Investment banking

UKDeutsche Boerse AG

14.3

Columbia Pipeline Group Inc.

Oil and gas USTransCanada Corp.

13.2

ADT Corp.Business services

USProtection One Inc.

12.4

Deal environment by sector and area by value, 1Q16 Top five announced deals by value, 1Q16

Source: EY analysis and ThomsonONE Note: Data is continuously updated and therefore subject to change.

*EMEIA is Europe, Middle East, India and Africa; **Asia-Pacific includes Japan

Quarterly global M&A activity


548.6706.6 586.3 579.6

919.3 845.9 883.3 845.11086.7 1111.1

1486.8

671.3

8,779 9,076

8,916 9,269

9,922 10,187

9,555 9,806 9,972

9,680

8,690

8,757

2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16

Value (US$ billion) Count


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M&A activity remained upbeat in 1Q16 and the momentum is expected to continue through 2016 despite a challenging global business environment.

In particular, domestic activity is likely to drive sustained M&A as more and more players, especially from sectors including infrastructure, manufacturing, retail and pharmaceuticals, aim at consolidating their domestic operations. Furthermore, we will likely see a spurt of divestment deals in the coming months as increased pressure from banks will force debt-ridden corporates to deleverage their balance sheets by selling assets. At the same time, technological disruption across sectors should keep businesses’ open to acquiring new capabilities with a view to remain relevant in their markets.

The attractiveness of India is evident from the findings of the recent edition of the EY Capital Confidence Barometer, with the country featuring in the top three preferred investment destinations globally for companies that are most likely to pursue acquisitions. Back home in India, the country ranks first, followed by the US and the UK as the preferred destination for M&A activity by Indian companies, indicating a continued increase in domestic activity. Furthermore, Indian executives’ positive view on credit availability and corporate earnings, coupled with a stable outlook on asset valuations, demonstrates expectations around higher deal closure in the near-term

From an inbound perspective, the global corporations in a wait and watch mode are focusing on portfolio and resource optimization, owing to the ongoing commodities slump and the low-growth environment at a global level. Nonetheless, the inbound activity is expected to remain steady due to the government’s efforts to push reforms and make India a preferred destination for doing business. On the outbound front, companies in sectors such as technology and pharmaceuticals will likely remain active as they look for opportunities overseas to gain access to high-end technology and diversify their product portfolios and market presence. The government’s focus to secure supplies of natural resources should also encourage the companies operating in the energy space to evaluate overseas acquisitions. The recent moderation in energy assets’ valuations globally should aid this trend.

Overall, the outlook for M&A activity looks promising and should witness sustained momentum.

Outlook

M&A activity in India to sustain momentum

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Methodology

Transactions quarterly is based on EY’s analysis of ThomsonONE’s M&A data.

• Data used in this edition is for the period 1 January 2016 to 30 March 2016.

• Deals have been taken from ThomsonONE.com through the “Advanced M&A” search, where an Indian company was either a target, acquirer, target’s ultimate parent or acquirer’s ultimate parent. The terminated deals have been excluded.

• Deals have been taken where “deal status” as per ThomsonONE.com was either pending, partially complete,

completed, pending regulatory or unconditional.

• Private equity deals or deals with a financial sponsor have been excluded.

• Deal values have been taken as stated in ThomsonONE.com (accessed 4 April 2016) or as per the company press release in certain cases. All amounts are in US$ unless otherwise stated. The conversion rate of non-US$ deals are in accordance with ThomsonONE.com guidelines — the foreign exchange rate as on the deal announcement date.

• For our analysis, deals have been classified into:

• Sectors: based on target’s business

• Inbound, outbound and domestic: based on target/ acquirer/target’s ultimate parent and acquirer’s ultimate parent countries

• Deal size: based on announced deal values

• Average deal size has been calculated as total deal value divided by number of deals with disclosed value.

• The numbers have been rounded off unless otherwise indicated.

• For any further details on the deal inclusion criteria used by ThomsonONE.com, contact us at [email protected].

Ernst & Young LLPEY | Assurance | Tax | Transactions | AdvisoryAbout EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

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© 2015 Ernst & Young LLP. Published in India. All Rights Reserved.

EYIN1510-121 ED None

This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither Ernst & Young LLP nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.

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