‘India’s business deals unaffected by economic slowdown’

July 15th, 2008 - 8:59 pm ICT by IANS  

A file-photo of KPMG

New Delhi, July 15 (IANS) Despite the economic slowdown that hit merger and acquisition (M&A) deals at global level in the first half of 2008, India has seen “a steady flow of transactions”, said a report. Consultancy major KPMG’s Global M&A Predictor said Tuesday that the focus of Indian companies has changed from aggressive growth to “consolidation and rationalisation”.

“Despite the global slowdown in deal activity, India is still seeing a steady flow of transactions, however the sentiment is changing from aggressive growth initiatives to consolidation and rationalisation of business strategy,” said Rohit Kapur, corporate finance head, KPMG India.

However, the report predicted that the global M&A activities would continue to fall in the second half of 2008.

Forward-looking corporate valuations have now gone down 10 percent compared to six months ago, it said.

Stephen Barrett, global chair, KPMG’s Corporate Finance Practice, said: “Findings from our latest predictor reveal strong evidence that market conditions for M&A transactions will continue to deteriorate across all regions and sectors.”

The five months up to the end of May 2008 saw 15,968 deals globally at a value of $1.42 trillion compared to the 19,784 deals recorded in the second half of 2007 - at a value of $2.16 trillion, the report said.

Africa and the Middle East regions saw the biggest drop in valuation.

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