Mergers and acquisitions (M&A) activity is set to more than double to $49.3 billion in 2019, according to a report by global law firm Baker McKenzie.
It added that it expects most of this activity to take place in sectors that are directly linked to personal consumption, such as healthcare, Internet and real estate.
The Global Transactions Forecast, along with Oxford Economics, added that, along with this improvement in M&A activity, India will also see a strong growth in the number of IPOs over the next four years.
Corporate buyer activity
“We do expect overseas corporate buyer activity to pick up as well, as India continues to be a focus for emerging market investors globally,” Ashok Lalwani, Global Head of Baker McKenzie's India Practice said. “Consolidation, restructuring and asset sales by highly-leveraged companies are expected to continue and drive M&A activity in India.”
“Sectors that are directly linked to the consumption story — financials, consumer, healthcare, Internet and real estate — will likely see good momentum on the M&A front,” he added.
According to the report, India saw $17.5 billion worth of M&A transactions in 2016, which it expects to grow to $28.5 billion in 2017, $42.2 billion in 2018, and $49.3 billion in 2019, before slowing again to $38.3 billion in 2020.
Cross-border transactions
By 2019, Baker McKenzie expects cross-border inbound transactions to make up 26.8% of total M&A transactions, up from the current share of 10.3%. IPO transactions are expected to grow to $4,756.1 million by 2019, up from the $4,042.2 million seen in 2016.
