India Inc announces $14 bn M&A deals in just 45 days in 2010

India Inc has once again started to splurge this year with the domestic firms announcing merger and acquisition deals worth a whopping USD 14 billion in just 45 days.

The way the companies have begun shopping, it looks the year 2010 is all set to overtake the M&A deal tally of 2009 by a huge margin.

In just 45-days of 2010 India Inc has announced deals worth USD 14 billion, while in the year 2009, corporate India made deals worth a modest USD 11.9 billion.

According to the monthly deal report of VCCEdge, a financial research provider, the M&A deal value during January 2010 stood at USD 2.8 billion and Sunday’s USD 10.7 billion Bharti-Zain offer, wherein Bharti intends to buy Kuwait-based Zain telecom’s mobile operations in Africa, takes the total kitty to over USD 14 billion.

In terms of deal size, the Bharti-Zain deal would be the third largest transaction involving an Indian firm after an estimated USD 13.5 billion offer by Reliance to get control of the bankrupt petrochemicals firm LyondellBasell Industries (which is currently under discussion) and the Tata Steel’s takeover of Europe-based Corus for USD 12 billion.

The Bharti-Zain deal could catapult Bharti Airtel in the league of world’s top 10 telecom operators.

Bharti has entered into exclusive talks with Zain for acquiring its African operations based on an enterprise value of USD 10.7 billion, the telecom major said in a statement on Monday.

This is Bharti’s third attempt in the last two years to enter the African market. In September 2009, Bharti’s talk with MTN for a USD 23-billion merger deal fell apart due to various regulatory hurdles, including dual listing.

Last month it had bought a 70 percent stake in Bangladesh’s Warid Telecom.

Some of the other mega M&A deals involving an Indian entity are the Vodafone Hutchison deal (USD 10.8 billion), the Hindalco-Novelis transaction (USD 6 billion), Daiichi- Ranbaxy (USD 4.50 billion), ONGC-Imperial (USD 2.80 billion) and NTT DOCOMO-Tata Teleservices (USD 2.70 billion).

In 2009, the global economic slowdown forced corporate Indiato look largely within the country for merger and acquisitions, as domestic deals accounted for about 60 percent of the USD 12-billion worth of deals.

The trend seems to be reversing as Indian companies have started to venture out and have announced or are reported to have interests in some multi-billion dollar outbound deals, such as the estimated USD 13.5-billion takeover of global petrochemicals major LyondellBasell by Mukesh Ambani-led RIL and the recent Bharti-Zain deal.

Industry experts, however, believe that though there has been an increase in deal activity since the last quarter of 2009, but it will still take some time before corporate Indiagets back to the peak M&A activity levels of 2007 and 2008.

Meanwhile, global M&A activity also seems to be bouncing back after the USD 19.5 billion Kraft-Cadbury deal and USD 2.7 billion Hewlett Packard-3Com deal, among others.