The second quarter (Q2) of 2023 saw $10bn in spending across travel and tourism mergers and acquisitions, but despite some interesting moves on airports, the aviation sector had a slow first half compared to 2022.
European companies dominated the M&A’s in Q2 with a 62% increase in the dollar value of the deals made, influenced by Yandex’s acquisition of 28.98% of Uber. But two stakes held by an investment holding company operating in India reveal a future growth area.
Fairfax India, a holding company focused on private and public equity securities in India, has twice invested in Bangalore Airport.
It first bought a 3% stake for US$75m, before extending its ownership to 10% with a second 7% purchase worth $175m.
These investments had the highest value in the Indian transport industry in Q2 and reflected both the growth in low-cost Indian airlines and the growing attractiveness of Bangalore in 2023.
The second-most valuable M&A in India in Q2 was NS Aviation’s 85% stake in Hyderabad’s regional airline TruJet (traded as Turbo Megha Airways).
According to GlobalData’s travel and tourism analyst Akshat Sharma, Fairfax’s stake is focused on a growing industry in a growing region of south-central India: “Fairfax’s investment in Bangalore Airport can be seen as a strategic move aimed at capitalising on the growth of the Indian aviation industry.
“The Indian low-cost carrier industry continues to grow and make air travel more accessible. Prominent low-cost operators, including IndiGo and SpiceJet, use Bangalore as a hub, which bodes well for passenger growth.”
Sharma further explained the importance of the city’s growth – and growing reputation – to the investment: “Bangalore, with a population of over 10 million, is widely recognised as the country’s preeminent technology hub, often referred to as the ‘Silicon Valley’ of India.
“This distinction has led to the city’s significant appeal among several technology businesses, resulting in a substantial influx of such enterprises, which drives business travel in and out of Bangalore.”
Our signals coverage is powered by GlobalData’s Thematic Engine, which tags millions of data items across six alternative datasets — patents, jobs, deals, company filings, social media mentions and news — to themes, sectors and companies. These signals enhance our predictive capabilities, helping us to identify the most disruptive threats across each of the sectors we cover and the companies best placed to succeed.
