India's M&A Deal Value Surges 66% in 2024, Outpacing Global Growth of 10% as total M&A Activity Reaches $1.6 Trillion

Global M&A industry is showing signs of revival after a challenging couple of years. The market is strengthening, even as some dealmakers remain cautious amid today’s complex political and macroeconomic landscapes. Still, others are forging ahead. Deal value in the first nine months of 2024 edged up by 10% compared with the same period last year, totaling $1.6 trillion.

The findings are revealed in the 21st edition of The Global M&A Report from Boston Consulting Group (BCG). The report is based on BCG analysis and insights from deals around the world.

M&A activity in India has been strong in 2024, bucking the trend in other Asia-Pacific markets. This robust performance marks a reversal of the sharp decline in deal-making that the country experienced from mid-2022 through 2023. In the first nine months of 2024, Indian deal value surged by 66% compared with the same period in 2023. That’s compared to a 10% increase globally and a 5% decrease in the Asia-Pacific region overall.

“While the global M&A market is on the road to recovery with a modest 10% increase in deal value this year, India is outpacing the global trend, showcasing a remarkable 66% surge in M&A activity in 2024. This growth stands in sharp contrast to the broader Asia-Pacific market, which saw a 5% decline, highlighting India’s unique resilience and appeal. Sectors like technology, media, industrials and healthcare have been key drivers of large deals, capitalizing on the “Make in India” initiative, India’s strengthening ties with US and Europe coupled with ongoing regulatory tensions between China and the West. Deal volumes in India have seen a marginal decline of 3%, but not as sharp as observed in Asia-Pacific and globally, both of which experienced a 13% decline. Deal closure timelines however have increased by 30% since 2018 on the back of increased government scrutiny. The Competition Commission of India is in the process of streamlining the merger approval process to reduce this substantially.

As we look ahead, the longer-term outlook for dealmaking in India looks robust. Companies with strong balance sheets will continue to look for opportunities to grow inorganically, and private equity and venture capital investors will seek to deploy record-high dry powder as India continues to be an investment destination of choice”, said Dhruv Shah, Managing Director and Partner, BCG

Here are some of the key Indian findings of the report:

· GOING DEEPER: Deal volume in India declined by 3%, but not as sharply as it did globally (13%) or in the Asia-Pacific region as a whole (13%).

· SECTOR SPECIFICS: Targets focused on technology, media, or telecommunications accounted for 40% of the total deal value during the first nine months of 2024. Despite cautious global sentiment, industrial companies continue to lead Indian dealmaking in 2024. Health care targets also remain an important focus, driven primarily by domestic deals as companies strive to maintain their leadership positions.

· REGULATORY ENVIRONMENT: A BCG study found that the average closing time for India-based acquirers has been increasing as government scrutiny intensifies. In 2022, deals required, on average, 220 days to close—an increase of approximately 30% since 2018. However, the Competition Commission of India (CCI) is set to release new merger regulations that incorporate global best practices and may reduce closing delays.

· LOOKING AHEAD: Over the longer term, dealmaking in India will remain robust as companies with strong balance sheets seek assets with attractive valuations. Companies will continue to focus on growth-oriented businesses that are financially efficient and have a controlled spending strategy. Private equity and venture capital investors will seek to deploy their record-high dry powder in cash-generating businesses to get a better return.

Here are some of the key global findings of the report:

· SIGNS OF PROGRESS: So far, 2024 has fallen short of expectations for a strong resurgence in M&A activity, as instead a slow recovery persists. Globally, M&A activity remains below historical norms—and particularly in comparison with recent years. However, activity has rebounded since the low point observed during the second half of 2022 and the first three-quarters of 2023.

· SECTOR SPECIFICS: This positive but slow momentum aligns with BCG’s M&A Sentiment Index, which shows a promising trajectory for most industries. The outlook is especially bright for the technology, energy and utilities, and health care sectors, while the consumer and industrial sectors continue to lag.

· DEALS DELAYED: Increased regulatory scrutiny and protectionist measures in some countries are having a noticeable impact on dealmaking. Globally, the period from signing to closing for deals exceeding $2 billion increased by 11% from 2018 to 2022, reaching an average of 191 days. In fact, BCG’s analysis found that approximately 40% of deals analysed failed to close within the originally projected timeline. Almost two-thirds of these tardy deals required an additional three months or more to close.

· AI AND M&A: Numerous AI-enabled tools are available to support the M&A process. For example, digital search tools enable better and faster identification of potential acquisition targets, and program management tools support integration and separation. During due diligence, advanced analytics and machine learning-based methods can provide insights by processing large amounts of structured and unstructured data, leading to faster and more accurate decision making.