Boost Expected for Mergers and Acquisitions in 2025 Amid Global Clarity

A year after key national elections globally, investors are eagerly anticipating a surge in mergers and acquisitions (M&As) in 2025, according to top executives at Investec Bank Plc. In an interview with the Mint, Charles Barlow, head of strategy execution for Investec Bank, attributed this growth to increased political clarity and a cooling initial public offering (IPO) market.

"We were clearly experiencing significant uncertainty last year," said Barlow. "Uncertainty typically leads to a slowdown in M&A activity. However, we are now hoping that with the completion of these elections globally, we will have more clarity, which should enable M&A to kick off again."

In India specifically, Investec expects a positive impact from the tempering of the primary capital markets on M&A activities. Vikram Surana, head of corporate finance and equity capital markets at Investec Capital Services (India), noted that the cooling of the IPO market will shift momentum towards M&A and private sponsor activity.

"The public markets have cooled down somewhat, which means we'll start to see more interest in M&A," said Surana. "We're ranging-bound between $60-100 billion annually for M&A and private equity activities over the past few years."

Indian companies are also showing increased interest in outbound transactions through smaller acquisitions, valued at $100 million to $300 million, adding to the anticipation for a surge in M&As in 2025.

Furthermore, Investec highlights that investing in India provides global investors with access to the vast and growing market of over 1.5 billion people, without having to invest in multiple countries.

For Investec, the outlook is optimistic, given its extensive track record in executing transactions. In the last five years, they have executed 40-45 transactions, averaging 8-9 deals per year in private markets, and closed $6 billion worth of deals through IPOs, along with investing $6 billion in India through credit.

The experts at Investec Bank are firmly convinced that a clear resolution on global economic politics will set the stage for increased M&A activity in 2025.