BANGLADESH Law and Practice Contributed by: A B M Nasirud Doulah and Amina Khatoon, Doulah & Doulah
1.3 Key Industries M&A activity in 2024 in Bangladesh was mostly focused on the energy and power sector, how - ever, certain other industries stood out. Major industry concentration in the past 12 months for M&A activity includes the following industries. • Healthcare and pharma ‒ this rise in M&A activity was driven by increased healthcare spending and traditional strengths in pharma manufacturing. Several pharmaceutical play - ers, such as Gulf Pharma, GSK, Sanofi and Novartis, partially or fully exited the market due to strong local manufacturing capabili - ties and competition. Amid renewed Chinese, Turkish and Saudi interests in the healthcare sector, IFU invested in a local business for its country-wide set-up. Evercare acquired the two largest hospitals in Bangladesh in 2020 followed by its 2023 acquisition by Black - stone which in late 2024 merged with Aster to form the second largest healthcare facility in South Asia. • Financial services/fintech – with the central bank enacting a framework for the merger of weak banks with strong banks, several interests have been engaged. Following the footprint of predecessors, another Sri-Lankan conglomerate CAL entered into the merchant banking and brokerage market. In the fintech arena, Softbank entered the market with a USD250m investment in the fintech unicorn Bkash. • Infrastructure and energy ‒ the surge in this industry was led by renewables with inves- tors’ interests driven by the demand potential of renewable energy, low production costs and encouraging policies and financial incen - tives like production-linked incentives given the government’s target to produce 10% of power by renewables by 2041. Also, investors like General Electric continued to procure sig -
• Off-market negotiated sale – this is a less common method of acquiring publicly listed shares but is gaining popularity in recent times as an off-market investment instrument in Bangladesh. The increased interest in such deals raises areas of new regulation such as valuation. • Start-ups ‒ start-ups in Bangladesh have always been a major focus for both local and cross-border private equity funds and private investors. However, recently there has been a renewed interest in local start-ups by devel - opment organisations such as Asian Develop - ment Bank (ADB) Ventures, the Investment Fund for Developing Countries (IFU) and ResponsAbility Investments, albeit the acqui - sition of stakes in such businesses is more driven by sustainability interests rather than return. • Diversification of investor portfolio ‒ deal making in several sectors continued and there was growing interest from multinationals and foreign investors due to the restoration of a more competitive regulatory framework for investors from diverse countries such as the USA and European countries. This is some - times driven by diversification strategies to avoid an over reliance on countries like China and India. • Infrastructure – infrastructure development through PPP was introduced in 2010, before which only power projects were allowed to be so developed. The PPP Act, 2015 further facilitated the development of infrastructure by the private sector. Accordingly, there has been a recent trend of M&A of such private sector infrastructure and power projects. As an example, the first toll road project, First Dhaka Elevated Expressway, was acquired by new investors in 2021 and 2024 to the extent of 49% and 100% respectively.
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