M&A (Mergers and Acquisitions) prospectives in 2011

Here was an article predicting a hotter M&A in the year 2011.

Brief writeup-> The past year has seen many M&A accounting upto 187 total outbound transactions valued at $21.31 billion and total transactions valued at $50 billion across 623 transactions including inbound transactions of India. The biggest one being Airtel's $10.7 billion acquisition of Zain Africa to explore new markets.“The outbound action will be hotter in 2011 though deal valuations might still not be as high as in 2007,” says Nikhil Nath, managing director and head, M&A, Asia at Nomura. The race for acquiring companies outside is being fuelled by India’s hunger for resources as the country tries to regain its 8-9 percent growth rate. In March 2010, Essar acquired US-based Trinity Coal for $600 million to feed its steel units in America. In December, Lanco acquired Griffin Coal Mining in Australia and RIL acquired equity interest in three shale gas assets in US. This very hunger accompanied by easier availability of finance, compared to 2008-09, is going to be the driver for outbound deals in 2011, say experts.Oil and gas, industrial products, power, mining and minerals sectors seem to be most promising ones in this context. And the most attractive shop among all is expected to be that of the pharmacist. Piramal-Abott and Reckitt Benckiser-Paras deals have raised the hopes of the players in this highly fragmented field. The domestic formulations sector is growing at an impressive rate of 15%. Telecom, on the other, is expected to see hectic activity because of the contention that India is not in a position to handle 10-12 players effectively.

My take-> The hunger for resources and markets promises a good year ahead for acquisitions especially in certain sectors like Oil and gas, industrial products, power, mining and minerals sectors. But the most attractive one seems to be the pharma sector. Telecom seems to be stagnated somewhat due to crowding of players in this sector. Thank you!