Mergers and Acquisitions in the Indian Sub-Continent: 2010-2019

Abstract

With rising growth rates and per capita income levels on the Indian subcontinent, foreign direct investment in the region, especially through mergers and acquisitions, has increased over the past decade. Using transaction data regarding the industry affiliation of the target and acquiring firms, deal size, deal structure, and deal completion rates from a worldwide M&A database compiled by Thomson Reuters’ Financial Services, this paper aims to provide contemporary and comparative information on merger and acquisition (M&A) activity in India, Pakistan, Bangladesh, and Sri Lanka over the last decade, 2010-2019. The findings have shown that the M&A transaction value and the number of deals in these four South Asian countries increased over this period. Similarities and differences among the four countries are discussed and compared. There was significant growth in the number of deals completed as well as the transaction value of mergers and acquisition activity in India, followed by Pakistan, Bangladesh, and Sri Lanka. Surprisingly, Sri Lanka had the second largest number of M&A deals, followed by Pakistan and Bangladesh. The findings show that Pakistan accounted for the second highest transaction value, followed by Bangladesh and Sri Lanka. It is interesting to note that the Sri Lankan M&A market had a high ratio (60 percent) of Sri Lankan firms acquiring other Sri Lankan firms, while in Bangladesh, non-Bangladeshi companies accounted for ninety-three percent of the value of all large M&A deals. Our future expectation for M&A opportunities in these four countries of the Indian subcontinent is that they will continue to expand. Future trends, important caveats, policy issues, and implications for managers planning M&A deals in the region are presented.