Published on October 19, 2020 by Saurabh Mahajan and Shivam Gupta
All eyes are on the 2020 US presidential elections scheduled for 3 November. Considering the US’s economic (contribution of c.15% …
Published on October 7, 2020 by Harshmeen Kaur
Corporates prefer to engage in mergers and acquisitions (M&A) to establish their presence in uncharted territories and grow rapidly. It helps save time, as they do not have to make greenfield investments and start from scratch in a new geography or business stream. It could also provide an opportunity to acquire the competition. Data for the past two decades shows that the number of M&A deals has increased despite a number of challenges, including the dot-com bubble, the global financial crisis (GFC) and the European debt crisis.
M&A activity improved significantly after such crises due to business restructuring, divesting non-core assets, sector consolidation and opportunistic acquisitions at attractive low valuations. Consolidation deals dominated in 2009 and contributed around 20% of total M&A value. The number of takeover deals started growing after the GFC and reached the highest levels since the crisis in 2014. The structure of successful megadeals included cash-and-stock offers such as Pfizer’s acquisition of Wyeth and AT&T’s takeover of DirectTV. The global annual average deal count was around 11,000 from 2001 to 2010; this increased to more than 13,000 from 2011 to 2019, an increase of around 20%. …
The incident in July, related to online retail giant Boohoo, brought to the fore the issue of “modern slavery” in the apparel sector. The sector also faces serious environmental challenges, as its two key raw materials-polyester and cotton-are a major cause of water pollution; the sector also generates significant waste. Growth in the fast-fashion (FF) has aggravated these environmental and social (E&S) challenges, and classifying a FF brand as “sustainable” defies prudence, in our view.