Inbound M&A in Bangladesh: what has changed for foreign acquirers

Inbound acquisitions into Bangladesh have clustered around a small number of sectors: energy and LNG, financial services and exchanges, telecoms, and consumer businesses with national distribution. The transactions have become larger and the counterparties more sophisticated. The execution risks have shifted accordingly.

Approvals are no longer the long pole

Foreign acquisition of shares in a Bangladeshi company is permitted in most sectors, subject to foreign exchange formalities and to sector-specific regimes in banking, insurance, telecoms and a handful of others. The approval process is better understood than it was, and the timetable is more predictable. What now drives the critical path is diligence — specifically land title, litigation exposure and tax history — rather than regulatory clearance.

Competition analysis has arrived

The Competition Act 2012 created a regulator with jurisdiction over anti-competitive agreements and abuse of dominance. Acquirers in concentrated sectors should expect to run a competition analysis as part of diligence and to consider engagement with the Commission, rather than treating competition as a post-closing compliance item.

Price the exit at entry

The recurring failure in inbound deals is a structure that works for entry and not for exit. Repatriation of sale proceeds, capital gains treatment, the enforceability of drag, tag and put arrangements under the Companies Act 1994 and the target's articles, and the realistic buyer universe at exit all need to be settled before signing.

• Run land title diligence early — it is the most common cause of timetable slippage.
• Separate remediable compliance defects from structural ones in the diligence report, and price them differently.
• Test whether shareholder protections are enforceable as drafted, not merely whether they are customary.
• Model capital gains and remittance on exit at term sheet stage.
• Agree the conditions precedent list against a realistic view of how long each approval actually takes.