M&A deals to hit $52.10 billion in 2019: Report

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Updated: November 6, 2019 4:55:53 AM

A highly notable deal was Canada’s Brookfield Infrastructure Partners’ $3.66 billion investment to acquire Reliance Industries’ Reliance Jio lnfratel unit, it pointed out.

M&A deals, Brookfield Infrastructure Partners, global headwinds, GDP, Reliance Jio, global GDP average growth rateM&A will decline globally from .8 trillion in 2019 to .1 trillion in 2020.

India dealmaking activity is expected to revert to the normal level in 2019, with total mergers and acquisitions (M&A) values seen at $52.10 billion as against the record highs of $81.60 billion witnessed in 2018, said a report by Baker McKenzie.

A highly notable deal was Canada’s Brookfield Infrastructure Partners’ $3.66 billion investment to acquire Reliance Industries’ Reliance Jio lnfratel unit, it pointed out. Despite the global headwinds, India M&A is expected to remain stable in the next few years, with private investments reviving against the backdrop of a more favourable business environment, the report said.

“The forecast predicts India’s GDP (gross domestic product) will grow by close to 7% through 2019-2022, ahead of the global GDP average growth rate of 2.8% for the same period,” it said.  In IPOs, total proceeds (which will be predominantly from domestic IPOs) are forecast to dip to $2.7 billion in 2020 from $3.4 billion in 2019, before picking up again in 2021 to $4.3 billion.

The report also highlighted global dealmaking will continue to slow down in 2020 because of ongoing worldwide economic uncertainty and the risk of global recession. M&A will decline globally from $2.8 trillion in 2019 to $2.1 trillion in 2020. It also forecast a downward trend in IPO proceeds from an estimated $152 billion in 2019 to $116 billion, a 23% decline.

Ai Ai Wong, chair of Baker McKenzie’s global transactional group, said that uncertainty would make slowdown inevitable. “Make no mistake — deals are getting done, but the current slowdown is inevitable, considering the continuing uncertainty around trade and regulation. We know that around the world, there are many investors and companies with capital on the sidelines, waiting to move forward with domestic and cross-border deals,” Wong said.
In Asia Pacific, the report predicts M&A activity declining 18% to $529 billion in 2020 from $634 billion in 2019 .

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