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Downturn. It’s Time To Buy.

In the post-Covid era, many organizations globally are either consolidating or hiving-off their businesses. It is providing opportunities to invest in a company or higher traction for acquisitions. Further, investors take the center stage to negotiate deals with companies who might have been hesitant to sell in the past. However, as the window of opportunity might be short, analysts opine that investors or companies planning for strategic investments need to put forth their bids in a swift manner. Companies that want to undertake M&A in this business scenario will need to employ unique strategies for getting the deal through.

In this period of volatility, it is imperative that companies or PE firms understand adjustments for implementing investment strategies. It is predicted that companies acquiring another organization early into recession might get higher returns than the ones entering in the later stages. However, all the practices of M&A need to be revisited in a recessionary period.

The momentum in M&A space was also observed in India, with the country witnessing USD 82.3 billion pending as well as completed M&A deals in the second quarter of the financial year – this was the highest amount as per data from Bloomberg. In fact, it was twice the previous record of USD 38.1 billion in the third quarter of the year 2019. In the global market, M&A volume in the present quarter reached at USD 827.6 billion, which was down by 8.7 per cent in the same quarter of the previous year.

Some of the deals which were noteworthy included:

  • HDFC Bank Ltd’s USD 60 billion all-stock purchase of Housing Development Finance Corp. in the month of April 2022. The company has now become one of the most valuable banks in India.
  • In the month of May 2022, Larsen & Toubro Ltd. announced merging of L&T Infotech Ltd. and Mindtree Ltd. This merger would help the companies to work on larger deals.
  • USD 10.5 billion deal from Gautam Adani to buy Ambuja Cements Ltd.
  • Shell PLC bought Sprng Energy Pvt for USD 1.5 billion in the month of April 2022.
  • TotalEnergies SE acquired 25 per cent stake in Adani New Industries Ltd. This move will allow the company to invest in newer technologies.
 

 

How Amros Can Help?

Amros Consulting is working closely with a select group of investors including two of India’s top consumer brands, a couple of PE firms and VC institutions that are actively evaluating M&A and investment opportunities in the Indian FMCG and consumer market.

If you are a FMCG/ Consumer/ Personal Care brand and seeking strategic partnerships or investments, which would help scale up your venture rapidly in online and offline markets, please get in touch with your IM at info@amrosconsulting.com.

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