Sun-Ranbaxy deal pushes domestic H1, M&As jump 22% to $20.5 bn

The mergers and acquisition (M&A) activity involving domestic companies jumped 21.9 per cent at $20.5 billion in the first half of 2014 over the same period last year, says a report.

"The value of announced M&A deals involving companies reached $20.5 billion during the first half of 2014 despite a 11.2 per cent slowdown in the number of deals from 582 to 517," a report by Thomson Reuters said on Thursday.

The average M&A deal size climbed to $95 million during the reporting period from $62.8 million the same period last year.

Domestic M&As stood at $10.1 billion, up 295.9 per cent compared to the first half of 2013.

"This was driven by Sun Pharmaceutical's pending acquisition of Ranbaxy Labs for $4 billion in a stock swap transaction. The deal pushed the healthcare sector to capture 39.6 per cent of the domestic deal making," the report said.

Completed M&A deals involving domestic companies totaled $14.9 billion, a 20.7 per cent rise compared to the first half of 2013, the highest first half period since 2011 which was at $20.7 billion.

The technology, media, and telecoms sector captured an aggregate market share of 13.3 per cent as combined deal value increased 22.5 per cent to $2.7 billion from the first half of 2013.

Foreign firms acquiring domestic companies reached $5.9 billion this year, a 41.3 per cent decline from the first half of 2013 alongside a 4.3 per cent drop in the number of announced deals.

The bulk of inbound acquisitions focused on the consumer staples sector in terms of deal value with $2.2 billion worth of transactions, despite a 42 per cent decrease over a year ago.

Domestic companies' acquisitions overseas stood at $1.4 billion during the first half of 2014, a 57.8 per cent decrease from the comparative period last year, and the lowest first half period since 2009.

According to estimates from Thomson Reuters, M&A advisory fees from completed transactions in the country totaled $77.9 million during the first half of 2014, a 32.8 per cent increase from the same period last year.