M&A Landscape in Bangladesh

Bangladesh has experienced an upsurge in local and cross-border mergers and acquisitions (M&A) deals in recent years. More acquisition deals in Bangladesh have been influenced by the country’s friendly foreign investment atmosphere and expanding entrepreneurialism tendencies. Despite the lockdowns in 2020 and 2021, several M&A transactions had taken place in Bangladesh, including Unilever Overseas’ acquisition of GlaxoSmithKline Bangladesh, Beximco Pharmaceuticals’ purchase of majority shares in Sanofi Bangladesh, Evercare’s $118 million acquisition of Apollo Hospitals Dhaka, Radiant’s acquisition of Julpahr Pharmaceuticals, China Huadian Acquisition of Mymensing 50MW Solar IPP and so on. Other cross-border M&A deals in Bangladesh have occurred across the chemicals, retail, logistics, tobacco, cement, power, textile, telecom, technology and financial sectors.

Legal Framework

In Bangladesh, in the absence of a comprehensive M&A statute, a blend of a number of statutes and by-laws regulate the M&A in Bangladesh. The Contract Act of 1872, the Companies Act of 1994, and the Competition Act of 2012 constitute the primary legal framework that governs M&A transactions in Bangladesh. Furthermore, public limited companies, including listed companies, must comply with the Bangladesh Securities and Exchange Commission Acts 1993, the Securities and Exchange Ordinance 1969, and the Bangladesh Securities and Exchange Commission (Substantial Acquisition of Shares and Takeovers) Rules 2018, and other security laws and by-laws implemented by the regulators from time to time.

The Bank Companies Act 1991, the Financial Institutions Act 1993, the Bangladesh Telecommunication Act 2001, the Telegraph Act 1885, the Petroleum Act 2016, and the National Digital Commerce Policy 2018, as well as relevant rules and by-laws promulgated thereunder, are some of the exhaustive industry-specific laws, by-laws and rules that are essential to address the issues and maintain a favourable legal environment in an M&A transaction.

Transactions incorporating foreign investments and currencies must also adhere to the Foreign Exchange Rules Act 1947 (FERA), the Guidelines for Foreign Exchange Transactions (the Guidelines), and other regulations, circulars, and guidelines issued by the Bangladesh Bank, the country’s central regulatory bank, which is also responsible for administering foreign exchange transactions in Bangladesh. Transactions including rebranding, intellectual property rights on inventions, trademark transfers, design patent transfers, and other similar activities are subject to the Trademark Act 2009, Trademark Rules 2015, Patent and Design Act 1911, and Rules of 1933.

Recent Major Developments

Despite the economic downturn induced by the Covid-19 pandemic, which resulted in a significant decline in FDI inflow[1], Bangladesh has seen some of the largest M&A deals in 2020 and 2021 and developments in the acquisition/takeover legislation and policies.

Unilever’s acquisition of GlaxoSmithKline’s local business

Unilever acquired an 81.98 percent share in GlaxoSmithKline (GSK) Bangladesh Ltd from Setfirst, a GSK Group member, for a total of 20.2075 billion Bangladeshi taka in June 2020, setting a DSE record for the highest exchange value of an individual company.[2]

Beximco’s acquisition of Sanofi’s local business

In October 2021, by entering into a share purchase agreement, Beximco Pharmaceuticals Limited, a prominent manufacturer and exporter of pharmaceuticals in Bangladesh, acquired 54.6 percent ownership in Sanofi Bangladesh Limited. The Bangladesh government owns the remaining 45.4 percent of Sanofi Bangladesh through the Bangladesh Chemical Industry Corporation (BCIC) and the Ministry of Industry.[3]

Evercare’s acquisition of Apollo Hospital

In the first part of 2020, Evercare and CDC Group, the UK’s development financing organisation, acquired a majority stake in STS Holdings Ltd, the infrastructure owner and operator company of Apollo Hospitals in Dhaka, for approximately an FDI of over 10 billion Bangladeshi taka. Evercare Hospital Dhaka is now part of the Evercare Group’s network of hospitals throughout South Asia and Africa, following its acquisition and rebranding.[4]

Radiant’s acquisition of Julpahr Pharmaceuticals

In January of 2021, Julphar Bangladesh, a subsidiary of United Arab Emirates-based multinational Julphar Gulf Pharmaceutical Industries, has been acquired by Radiant Pharmaceuticals for roughly 1.4 Billion Bangladeshi taka, which has been one of the largest takeovers in the pharma sector. 

Akij Group acquisition of Janata Jute Mills

During the Covid-19 epidemic, Bangladesh’s Akij Group, which owns the world’s largest jute yarn manufacturing unit, purchased Janata Jute Mills for roughly 7 billion Bangladeshi taka, making it the country’s largest-ever silent acquisition. Sadat Jute Mills, a second Janata factory in Cumilla that launched in 1985, and a cold storage facility, were also included in the transaction.[5]

The Bangladesh Securities and Exchange Commission (Substantial Acquisition of Shares and Takeover) Rules 2018

The Bangladesh Securities and Exchange Commission (Substantial Acquisition of Shares and Takeovers) Rules, 2018 on substantial acquisition of shares and takeovers has been a welcome shift in Bangladesh’s M&A landscape. Apart from including a mechanism such as an application for requesting an exception from the rules’ limits, also permit large-scale acquisitions of shares in a publicly listed company through cash purchases through the securities exchange and negotiated arrangements, both within and outside the exchange’s trading system.

National Digital Commerce (Amended) Policy 2020

In the immediate aftermath of the covid-19 pandemic, the government issued the National Digital Commerce (Amended) Policy 2020, which removed the requirement of establishing a joint venture with a local company and allowed wholly foreign-owned e-commerce entities to operate in the country as long as they adhered to the country’s laws, rules, regulations and guidelines, which had previously deterred potential large conglomerates from entering the country’s digital market space.

Bangladesh’s Competition Act 2012

Acquisition, assuming control, amalgamation, or merging in commerce are all examples of combinations under Bangladesh’s Competition Act. The Act particularly forbids any combination that creates or is likely to cause an unfavourable effect on competition in the market for goods or services, which is especially crucial for mergers.  As a result, prior authorisation of the appropriate regulator may be required for combination transactions if the relevant regulator is satisfied that the combination would not have an unfavourable effect on competition. Despite the legal framework, there is still very little enforcement of legislation particularly when it comes to controlling M&A transactions.

M&A Potential in Bangladesh- The Way Forward

Despite the global pandemic, Bangladesh has been witness to some of the most significant M&A deals in 2020 and 2021. Bangladesh has seen growth in inbound M&A deals and transactions, as well as an abundance of foreign direct investment (FDI). Given that Japan, Korea, the United States, the United Kingdom, and other EU nations are considering shifting their manufacturing from China, Bangladesh has the potential to attract more FDI in the area.[6]

M&A can be one of the key tools used to revitalise the financial sector and expand business in the context of Bangladesh. The stage is now set to welcome the M&A advisors to come forward and begin the process. Reportedly, there are several other NBFIs in vulnerable positions. Many investors believe that the M&A ecosystem in the country can play an integral in diffusing this alarming situation.[7]

Outbound acquisitions are uncommon in Bangladesh, owing to the authorities’ traditionalist approach and the lack of a legal structure for such outbound or outward investments coupled with restrictions in foreign exchange regulations. A hard look at M&A laws with respect to both inbound as well as outbound transactions is a much-needed undertaking that the government should engage in since the laws that currently apply to M&A transactions seem to be fragmented, some unenforced and some too restrictive for businesses to flourish. Making Bangladesh an investment destination in the region has been a recent priority for Bangladesh, and it is along those lines that Bangladesh is expected to create a regulatory framework that helps Bangladesh become the next “Asian tiger”.

Written and compiled by the Corporate and M&A team at Mahbub & Company

[1] Foreign Direct Investment and External Debt, Bangladesh Bank (July–December 2020)


[2] Ahsan Habib Tuhin, ‘Unilever acquires 82 per cent stake of GSK Bangladesh’, The Business Standard (28 June 2020). https://www.tbsnews.net/companies/unilever-acquires-82-stake-gsk-bangladesh-99277

[3] TBS Report, ‘Beximco Pharma completes Sanofi acquisition’, The Business Standard (1 October 2021). https://www.tbsnews.net/economy/corporates/beximco-pharma-completes-sanofi-acquisition-310132

[4] TBS Report, ‘Dhaka’s Apollo becomes Evercare Hospital’, The Business Standard (31 March 2020) https://www.tbsnews.net/bangladesh/health/dhakas-apollo-becomes-evercare-hospital-63487

[5] Sajjadur Rahman, ‘Janata Jute Mills changes hand in Tk 700 cr deal’, The Business Standard (28 June 2020). https://www.tbsnews.net/companies/janata-jute-mills-changes-hand-tk700cr-deal-99301

[6] Suhan K, Mamun C, ‘Structuring and financing Foreign Direct Investment (FDI) in Bangladesh’, Asia Business Law Journal (14 July 2020)

[7] Bhuiyan, Dr,  ‘Mergers and Acquisitions: A possibility in Bangladesh’, The Daily Star (6 Sep, 2019)