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Retail and consumer sectors continue to lead in terms of M&A deal volume: PwC India

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The overall M&A deal value during January – March 2024 soared by 60% to $ 19.6 billion in, while that of private equity (PE) experienced a slight dip

New Delhi: The retail and consumer sectors continue to lead in terms of merger and acquisition (M&A) deal volume in January-March 2024, according to a PwC India report. The media and entertainment sector topped the charts in terms of value.

Moreover, the retail and consumer sectors continued to display a high deal volume, with 81 transactions in the first quarter, followed by the technology sector at 49 deals.

Sectors like media and entertainment, power, pharmaceuticals, retail and consumer, and financial services saw high deal values, showcasing substantial investment in traditional sectors.

The overall M&A deal value during the period soared by 60% to $ 19.6 billion, while that of private equity (PE) experienced a slight dip.

With 455 deals amounting to $25.6 billion disclosed value, the first quarter of 2024 showcases a 24% rise in deal volume compared to the fourth quarter of calendar year 2023 – marking a notable resurgence, as per PwC India report ‘Deals at a glance’.

“This signals a shift from the declining trend observed throughout 2023,” it added.

As per the report, there were 143 domestic M&A deals, with the largest one touching $ 4.5 billion. The overall deal value for the first quarter of 2024 stands at $ 25.6 billion, a significant increase from the previous quarter and the corresponding period last year.

Dinesh Arora, Partner & Leader – Deals, PwC India, said that amid a landscape ripe with opportunities, the Indian economy emerges as a beacon of resilience.

“The first quarter of 2024 showcases the best figures in the last six quarters, owing to the momentum of the market and large-ticket deals, hinting at a bold appetite for strategic expansion and market dominance.

“The quarter also heralds a promising horizon for capital markets and embodies an unyielding optimism. As dealmakers, businesses, and investors look towards the future, the energy is palpable,” Arora said.

According to the report, in the first quarter of 2024, the market activity in terms of volume shows a significant uptick compared to the last two quarters.

In the first quarter of 2024, the market activity in terms of volume shows a significant rise compared to the last two quarters. M&A deals and PE investments rose by 23% and 24%, respectively.

“The total deal value exhibits a significant rise this quarter, led by M&A deals, where deal value soared from $12.2 billion in Q4 calendar year (CY) 2023 to $19.6 billion in Q1 CY24 – marking a 60% increase,” the report said.

Despite a slight dip in PE deal value from $7 billion to $6.1 billion in the first quarter, the total deal value for January-March 2024 stands at $25.6 billion – 33% higher than the last quarter of 2023.

This quarter witnessed 14 deals with value over $ 500 million compared to just nine such deals in Q4 CY23, of which 12 are M&A transactions, the PwC India report said.

The average ticket size for M&A remained unchanged, while the same for PE investments saw a decline of 39 per cent, indicating that although the number of deals increased, the majority of these deals had smaller ticket sizes. Most deals with disclosed values were in the lower- and mid-market segment, with around 80 per cent of the total deals below $ 50 million.

The largest deal of the quarter comes from the media and entertainment sector, where Reliance Industries signed a binding agreement with Disney to form a joint venture, combining the businesses of Viacom 18 and Star India. This is expected to create a media behemoth across TV broadcasting, streaming, movies and sports.

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