Sector-Specific Trends in Mergers and Acquisitions
Sector-SpecificTrends in Mergers and Acquisitions
I. Introduction
This Article provides an insightful overview of India’s M&A landscape during the first half of 2024, primarily relying on recently released statistics of Q2 2024. Further, it delves into notable transactions across key sectors - pharmaceutical, financial services, energy, automative and technology sectors. This comprehensive analysis highlights India’s economic resilience and its growing appeal for investment.
The following sections delve into the sector-specific trends and notable transactions that have defined India's M&A landscape during the first half of 2024.
II. Pharmaceutical and Healthcare
The Pharmaceutical and Healthcare sector during Q2 of 2024, this sector experienced an average deal size of $74million. The healthcare and medical devices segment to this sector attracted significant investors' interest, with a total of 18 deals valued at $ 2.0 bn[1] were noticed during this period. Where Dr Reddy’s Laboratories acquisition of Haleon PLC-NorthStarSwitzerland SARL valued at $663 million[2] alone. The portfolio to be acquired by Dr. Reddy’s Laboratories consists of Nictinnell global NRT brand and its local market leading brand names Nicabate, Habitrol and Thrive[3].
The technology and medical devices segment in this sector also witnessed a significant investor interest contributing to the overall deal value as compared to the previous quarter themedical devices segment witnessed 87 times increase in deal value.
The overall deal summary for the pharmaceutical and healthcare sector during Q2 of 2024 is specified below[4]:
III. Financial Services
The Financial Services sector during Q2 2024 witnessed 15 M&A transactions worth $867 million across various segments including fintech, asset management, insurance and non-banking financial companies (NBFC) sector. This sector also witnessed three IPOs[5]- Aadhar Housing Finance Limited, Go Digit Insurance Limited and Akme Fintrade India during Q2 2024, which has further contributed to investor confidence in India’s market indicating a strong demand for financial services companies. The notable deals witnessed during this period include HDFC Bank’s acquisition of a 4.99% stake in Induslnd Bank for approximately $1.49 billion and LIC’s investment of $ 1.5 billion in HDFC Bank.
The trend is largely driven by the need for scale, efficiency and adoption of new technologies to stay competitivein a rapidly evolving market. The Indian government is of the opinion that growth in the fintech sector would reach $150 billion by 2025. This growth shall be driven by trends with respect to AI-powered financial advisory, alternative finance, credit on UPI (Unified Payment Interface).
IV. Energy
The Energy sector emerged as a focal point for foreign investors as India is slowly transitioning towards renewable energy. During Q2 2024, the overall deal activity in India in the energy sector was 40 deals worth $57billion[6]. The Indian government through their various plans and policies, for instance; setting an ambitious target of 500 GW of clean energy capacity by 2030; introducing of production incentive scheme aimed to enhance solar power capacities; and green open access isfocusing to increase the overall growth and value in terms of deal value and volume in this sector.
V. Automative
The Automotive sector experienced a notable increase in M&A particularly in the auto components and electric vehicle (EV) segments. During Q1 2024, the automotive sector witnessed 24 M&A deals valued at approximately $357million notably as India aims to increase it’s manufacturing capabilities owing to the ongoing Make in India initiative. The growth and M&A activities in this sector is vital for India’s ambitious target of net zero emissions target by 2070 and India’s automotive industry shift towards EVs and sustainable mobility solutions. The top M&A deals of Q1 2024 is mentioned in the tabular format below.[7]:
VI. Technology, Media and Telecommunication
The Technology, Media and Telecommunication(TMT) sector, showcased a robust growth and strategic acquisitions. This dynamic industry has been a key driver for India’s M&A landscape during the year 2024, showcasing a pivotal transformation to digital media and rising demand for Over-the-top (OTT) media services. During the first half of 2024, the TMT sector witnessed $ 16.7 million in M&A activity[8].
The top deals in thefirst half of 2024 are mentioned in the tabular format below[9]: -
Further, India during Q2 2024, witnessed a merger between Walt Disney and Reliance Industries’ media assets valued at approximately $3.1 billion. This period also witnessed Data Infrastructure Trust’s $3bn merger with ATC India and Google’s $700 million investment in Airtel.
The TMT sector, driven by strong economic fundamentals, government support for digitalisation and investor interest in emerging technologies mainly in AI, showcases India’s growing domestic and international investment.
VII. Conclusion
The M&A landscape of India during 2024 reveals the resilience of the Indian economy and its appeal to both domestic and international investors. The pharmaceutical sectors significant growth driven by Dr. Reddy’s acquisition of Haleon PLC reveals the importanceof healthcare and medical devices in India’s M&A landscape. Meanwhile, the financial services sector continues to attract investment primarily in fintech, insurance and NBFC segments playing a pivotal role in driving innovation. The energy sector's focuson the renewable segment align strategically with India’s sustainability goals. Additionally, the TMT sector continues to experience robust growth exemplified by notable transactions of Disney’s merger with Reliance Industries’ and Google’s investment in Airtel.
These developments position India as a major global player in worldwide M&A transactions, with strong prospects for growth and investment.
[1] M&A dealtracker, April 2024, https://www.forvismazars.com/in/en/insights/thought-leadership-reports/m-a-deal-tracker (Last Accessed on 17th September 2024).
[2] M&As in India soar to new heights: Here are the top deals of Q2 2024, https://www.business-standard.com/finance/personal-finance/m-a-in-india-soars-to-new-heights-here-are-the-top-deals-in-q2-2024-124070800292_1.html (Last Accessed on 17th September 2024).
[3] https://www.drreddys.com/cms/cms/sites/default/files/2024-06/Press%20release%20-%20Dr.%20Reddy%27s%20to%20acquire%20Nicotinell%20consumer%20healthcare.pdf, ( Last Accessedon 17th September 2024).
[4] https://www.grantthornton.in/globalassets/1.-member-firms/india/assets/pdfs/dealtracker/pharma_and_healthcare_dealtracker_q2_2024.pdf (Last Accessed on 18th September 2024).
[5] https://www.grantthornton.in/insights/thought-leadership/financial-services-dealtracker-q2-2024/, (Last Accessed on 17 September 2024).
[6] https://www.globaldata.com/store/report/power-industry-m-and-a-deals-by-theme-quarterly-analysis/, (Last Accessed on 18th September 2024).
[7] Source: Report,Grant Thornton, Volume 20.03, April 2024, (Last Accessed on 18th September 2024).
[8] https://www.ibef.org/news/tech-drives-india-s-m-a-market-in-the-first-half-of-2024-top-10-deals-decoded, (Last Accessedon 18th September 2024)
[9] https://www.business-standard.com/finance/personal-finance/tech-drives-india-s-m-market-in-first-half-of-2024-top-10-deals-decoded-124071000464_1.html, (Last Accessed on 18th September 2024)
