Tariff war to impact global M&A flow: Rothschild's Sachak

Subscribe to enjoy similar stories. MUMBAI : 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.