FICCI-KPMG-Report-13-FRAMES

12
The power of a billion: Realizing the Indian dream
The year 2012 saw overall Mergers and Acquisitions (M&A) and private
equity funding in India totaling approximately 1,000 deals with a value
exceeding USD 49 billion 1 .
Deal activity in the M&E sector witnessed a significant uptrend, with 35
transactions with a reported value in excess of USD 1.5 billion 2 , versus 42
transactions valued at USD 1017 million in 2011 and 27 transactions valued
at USD 693 million in 2010. The growth in the Indian M&E industry has
continued to be driven by favorable demographics, consumer acceptance
of new media platforms and relaxation of FDI regulations across several sub
sectors.
Deal activity in the Indian M&E industry was primarily driven by the following
trends 3 :
• Growing importance of regionalization: regional broadcasting networks
and print publishers have witnessed interest from national players who
are focusing on growing their regional portfolios and developing localized
content.
• Digitization of C&S households: both cable and DTH operators have and
will continue to evaluate various fund raising options as well consolidate
with regional MSO’s and LCO’s as digitization is implemented throughout
the country, which will result in transparency of subscriber ownership.
• Industry consolidation: select verticals, such as the film exhibition
industry, witnessed deal activity with strategic and private equity players
consolidating the industry to cement market leadership.
While the overall number of deals resulting from M&A and private equity
funding saw a decline from 2011, the M&E sector saw a significant
increase in deal value, attributable to few high value transactions. Marquee
transactions in 2012 include Network 18 Media and Investments’ acquisition
of Eenadu TV for USD 395 million 2 , Sony Corporation’s acquisition of a 32
percent stake in Multi Screen Media Limited 2 and Aditya Birla Group’s
acquisition of a 27.5 percent stake in Living Media India Limited for a reported
USD 70 million 4 . Several private equity funds have made investments in the
sector, with the most notable being L Capital Asia, making investments in
film and TV production and theatres and Providence Equity Partners, making
an investment in the cable business.
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Trend of investments in M&E (Investor type)
Source: Mergermarket, Bloomberg, Venture Intelligence accessed on 24th January, 2013, KPMG in India Analysis
01. GT deal tracker, 2012
02. Mergermarket, Bloomberg, Venture Intelligence accessed on 24th January, 2013
03. KPMG in India Analysis
04. Aditya Birla Group acquires stake in Living Media India, Business Standard, May 19th, 2012
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