2025 M&A Surge Predicted Amid Global Political Clarity and Cooling IPO Market

Mergers and acquisitions (M&As) are expected to increase in 2025 due to clearer political conditions after numerous national elections in 2024. Charles Barlow, head of strategy execution at Investec Bank, noted that uncertainty in 2024 slowed M&A activity. With elections in countries like the US, UK, Germany, France, South Africa, and India, Barlow believes that 2025 will provide a better understanding of the global market, leading to a rise in M&A.

In India, Vikram Surana, head of corporate finance and equity capital markets at Investec, sees potential for M&A growth as the initial public offering (IPO) market cools. He stated that as the public markets slow down, companies may prefer M&A and private investments.

Historically, India has maintained M&A and private equity activity between $60 billion and $100 billion annually. Surana predicts this trend will continue, with investments focusing on sectors like manufacturing, pharmaceuticals, and IT services.

Private investors have achieved significant returns, prompting increased investments in India. Indian firms are also engaging in outbound transactions, particularly smaller acquisitions worth between $100 million and $300 million. Barlow explained that these acquisitions are often linked to Indian operations.

What factors are driving the anticipated increase in mergers and acquisitions in 2025 according to Charles Barlow?

Interview with Charles Barlow and Vikram Surana on the Future of Mergers and Acquisitions

News Directory 3: Thank you for joining us today, Charles Barlow and Vikram Surana. Let’s begin by discussing the anticipated increase in mergers and acquisitions (M&As) in 2025. Charles, could you elaborate on the factors you believe will contribute to this rise?

Charles Barlow: Thank you for having us. The key to understanding the dynamics of M&A activity lies primarily in political stability. The numerous national elections scheduled for 2024, particularly in major economies like the US, UK, Germany, France, South Africa, and India, have created a climate of uncertainty. Businesses are often hesitant to engage in M&A during such times, as unpredictable political outcomes can impact market conditions and valuations. However, once those elections have taken place and clearer political conditions are established, I anticipate that there will be more confidence in the global market, leading to an uptick in M&A activity in 2025.

News Directory 3: Vikram, from your perspective in the Indian market, how do you see M&A activity evolving, especially in light of the current IPO market cooling?

Vikram Surana: The cooling of the IPO market presents a unique opportunity for companies to pivot towards M&A and private investments. Historically, India has seen M&A and private equity activity remain robust, typically ranging between $60 billion and $100 billion annually. With the slowdown in public offerings, I believe we will see more companies choose the M&A route, seeking favorable transactions that allow them to grow without the public market’s pressure. We’re likely to observe significant investments in sectors like manufacturing, pharmaceuticals, and IT services, which are critical for India’s economic landscape.

News Directory 3: Charles, you mentioned the potential for outbound transactions by Indian firms. Could you provide further insights on this trend?

Charles Barlow: Absolutely. Indian firms are increasingly looking to expand their global footprint through outbound acquisitions, particularly targeting smaller transactions in the range of $100 million to $300 million. These deals often relate back to enhancing their domestic operations or acquiring new technologies and capabilities that can benefit their existing businesses. This strategic approach not only allows Indian companies to scale internationally but also helps them to innovate and compete more effectively on a global stage.

News Directory 3: Vikram, can you discuss the appeal of India for global investors and the role of private investment in this landscape?

Vikram Surana: India offers a unique value proposition for global investors—a vast market of 1.5 billion people with relatively straightforward investment opportunities, as they don’t need to navigate multiple country markets. This singular market focus makes it easier for investors to strategize and deploy capital effectively. In recent years, private investors have experienced significant returns from their investments in India, which has further spurred interest. This trend of increasing private investments complements the ongoing M&A activity and marks a positive outlook for the Indian economy.

News Directory 3: Charles, how has Investec’s involvement in India reflected these trends in M&A and IPO activity?

Charles Barlow: Over the past five years, Investec has been quite active in the Indian market, completing around 40 to 45 transactions, averaging 8 to 9 each year in the private markets. Together with SBI Caps, we have managed approximately $6 billion in IPO transactions and closed 65 credit transactions, investing that same $6 billion through those credits in India. Our continued engagement in these areas demonstrates our confidence in the growth prospects of the Indian market and the broader M&A landscape.

News Directory 3: Thank you, Charles and Vikram, for sharing your insights on the future of M&As, especially in India. Your perspectives offer a valuable look at the market trends shaping the business landscape in 2025 and beyond.

For global investors, India offers access to a large market of 1.5 billion people without the need to invest across multiple countries.

In the last five years, Investec has completed 40-45 transactions in India, averaging 8-9 per year in the private markets. Together with SBI Caps, Investec has managed $6 billion in IPO transactions and closed 65 credit transactions, investing the same $6 billion in India through those credits.