Large cross-border transactions and consolidation have marked an upturn in mergers and acquisitions (M&As) in the technology sector globally during the first half of 2003.
The top 10 deals were struck in telecom sector, which is looking at ways to reduce debt and refocus on its core activities.
PricewaterhouseCoopers’ (PWC) latest report, Technology Sector Insights, released today shows market confidence with the return of large transactions in 2003.
“In India, M&A in the technology sector (including telecom) accounted for approximately 19 per cent of the total deal value during first half of 2003.
Information technology contributed 5 per cent and telecom 14 per cent of the total deal value during this period.
In the business process outsourcing (BPO) segment, most deals in India have been backed by venture capital, said PWC director Deepak Kapoor.
In 2002, $127 million was invested in Indian BPO companies in 12 deals, which was approximately 25 per cent of the total value of the private equity investment, across all sectors in India and 40 per cent of the total number of private equity investments in India.
Cross-border deals have increased in 2003 as acquirers have become less risk averse and have regained confidence in the economy.
Another important factor has been the increasing convergence between technologies, such as voice and data networks.
This will continue as hardware, software, telecommunications and IT services companies look to merge, stated the PWC report.
Worldwide, software and IT services accounted for 50 per cent of total technology deals in terms of numbers and 32 per cent by value in the first half of 2003.
Prominant among these were large telecommunications deals, accounting for 30 per cent and 55 per cent of total market volume and value respectively.
Hardware suppliers have suffered with deal values falling from 20 per cent in 2002 to less than 3 per cent in the first half of 2003.