MUMBAI
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The global tariff war will likely impact merger and acquisition (M&A) activity adversely, said Akeel Sachak, partner and global head of consumer at Rothschild & Co., adding that US President Donald Trump’s aggressive stance on tariffs has sparked a broader concern among economies, and it is already reflecting in the way markets have moved.
“Most certainly, I expect the Trump effect to adversely impact M&A as it has made it very difficult for companies to read what the economic prospects might hold and how their own businesses will be affected by the range of different tariff war possibilities we are facing,” Sachak said.
According to him, corporates tend to pursue more M&A when they feel secure about the prospects of their businesses. “Until a couple of weeks ago, I had a different view, expecting the wilder rhetoric around tariffs to blow over, but now I am not so sure. The stock markets are reflecting this with the major indices moving from sustained optimism to a much bleaker view since Trump’s re-election,” he added.
Besides, better domestic growth prospects have ensured that Indian corporates are more inward-focused and less ready to diversify globally. Strong domestic growth in key markets will also mean the larger cross-border M&A activity is likely to be muted, he said.
“US companies, at the moment, have probably seen more growth in their backyard than they are seeing anywhere else, and therefore, they will be more inwardly focused, in the same way as Indian corporates, by and large, see better growth on their doorstep than they do outside India. So, there isn’t the imperative to geographically diversify, there might have been in previous periods,” Sachak said.
Rothschild & Co., a pure-play investment bank, advises clients in over 70 geographies. In 2024, it advised global beverages company Coca-Cola to divest a 40% stake in its bottling unit Hindustan Coca-Cola Beverages (HCCB) to Jubilant Bhartia Group for $1.47 billion.
India business
The consumer sector is amongst the firm’s largest practice area, said Sachak, who has been with the bank for more than four decades and sits on its global board.
Talking about the opportunities in the Indian consumer sector, Subhakanta Bal, managing director, Rothschild & Co., said consumer sector opportunities in India are in a pretty sweet spot from a demand standpoint.
“You’ve got private equity that is keen on doing more in consumer. There’s fairly strong inbound interest from some of the global majors, especially for scaled-up assets,” Bal said, adding that if there are really small assets in India, it probably doesn’t make sense for a global company as it doesn’t change the scope of operation, the scale of operation in India.
“But for anything sizeable, there will be global majors looking to acquire in India. Plus, there is strong domestic interest from larger local players to acquire and grow faster.”
The firm is now expanding its focus areas in India, one of its most important markets outside of Europe and the US, Sachak said.
It has begun equity capital markets or ECM advisory in India. “We have always been focused on M&A from an India standpoint. Globally, ECM is a big part of our activity. From an India perspective, I would say ECM now is a big area of focus, in addition to M&A. We’re currently working on multiple live mandates in IPO advisory in India,” Bal said.
