M&A activity slows down in July: Grant Thornton

A report from data compiler Grant Thornton shows that the total value of deals made in July this year has been less than the value of deals in July 2011 and 2012. Raja Lahiri, partner - transaction advisory services at Grant Thornton spoke to CNBC-TV18 regarding the report, numbers and the key factors driving mergers and acquisitions in the country.

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Below is the verbatim transcript of his interview on CNBC-TV18

Q: How do the numbers stack up and what were the key factors driving merger and acquisition (M&A) activity in July?
A: The first half of July has not been too bad in terms of the overall deal values. Specific to July we saw USD 2.3 billion deals. Private equity was USD 0.8 billion and USD 1.5 billion was M&A. However, overall deal momentum is showing signs of slowdown in terms of volumes but there are some large deals that have got struck this month.

Q: What are the big deals that we saw in July 2013?
A: The major deal in July this year was a restructuring done by Holcim, close to USD 585 million. It was more of an internal restructuring though where Ambuja Cements, Holcim and ACC pretty much there was an internal group restructuring done by where Ambuja will actually be a holding company of ACC and Holcim increasing its stake in Ambuja Cements. So, there was a pretty large restructuring done, the approvals are yet to come but that is a large one.
The second one is in the private equity, we saw Flipkart raising USD 200 million from Naspers and the existing investors. Blackstone has been very active, they have announced a USD 100 million plus transaction in the auto component space, another large deal.
In the outbound space we saw Cipla in the pharmaceutical space picking up the South African asset for more than USD 200 million. So, those were the kind of top deals in July.

Q: If I were to get sector specific, it seems the highest traction that we are seeing is in cement and pharma space?
A: Pharma, healthcare it's been a good sector. It is seeing activity and will continue to see activity. Pretty much medical devices, it is the sector we believe will see some strategic interest as well. Private equity is also pretty much hot on healthcare. So, that is a sector to watch out for.
We are slowly seeing signs of interest from the inbound side especially from Japan. Sectors like IT, retail, and consumer, pretty much inbound interest is coming up from Japan. So, some of these would be hopefully sectors to watch out for in the year to come.