Mergers and acquisition (M&As) activity may reach USD 46.5 billion in 2017 and is likely to touch USD 52.8 billion in 2019, aided by government efforts towards ease of doing business, says a report. In 2018, the global deal activity will accelerate due to the easing of key economic and political risks and the emergence of positive macroeconomic deal drivers, a report by American law firm Baker McKenzie said.
“India M&A is expected to reach USD 46.5 billion (944 deals) in 2017, boosted by Rosneft’s USD 13 billion takeover of Essar Oil,” the Chicago-based firm said.
The 2017 figure represents a 165 per cent increase in value and a 70 per cent jump in volume from 2016 (USD 17.5 billion, 553 deals).
“M&A activity is expected to continue to gather pace on the back of government’s continued efforts in removing regulatory hurdles and simplifying laws to further attract foreign investment, until it reaches its cyclical peak of USD 52.8 billion in 2019,” the report said.
Pending the results of the 2019 national elections, there is potential for more ambitious economic reform.
The report further said domestic IPO is set to reach a record-breaking value of USD 6.8 billion this year.
Finance Minister Arun Jaitley’s plans to raise Rs 72,500 crore from disinvestment in 2018, including Rs 15,000 crore from strategic asset sales will help to sustain this IPO momentum.
Baker McKenzie’s head (India practice) Ashok Lalwani said the flurry of IPO activities is likely to continue for the rest of this year and well into the early part of 2018, as corporate India seeks to take advantage of a surging domestic equity market.
“As the country prepares for the general elections in 2019, I will not be at all surprised to see a surge of IPOs by private companies in the next few months before the deal window closes,” Lalwani added.