Mergers and Acquisitions (M&A) are strategic corporate transactions through which companies consolidate, combine, or gain control over other businesses. One of the methods of overseas investment is M&A. Overseas investors acquire local companies to understand the market through the experience of local companies. On the other hand, M&A can reduce the number of independent competitors, increasing market power. Mergers may reduce the number of independent competitors, increasing the risk of monopoly or oligopoly.
M&A refers to legal and financial transactions through which companies combine, or one company gains control over another. Merger -Two or more firms combine into a single entity (e.g., A + B =AB) while acquisition -One firm purchases a controlling interest in another (e.g., A controls B). Both actions affect market structure, competition, employment, and consumer welfare, which is why competition authorities regulate them under Merger Control or M&A Regulations. They reshape market structures, influence economic power distribution, and can significantly affect competition, innovation, and consumer welfare.
The Competition Commission of any country oversees the M&A. Under Section 21 of the Bangladesh Competition Act, 2012, the Bangladesh Competition Commission (BCC) is empowered to review and control mergers that may adversely affect competition.Bangladesh Competition Commission start the journey in 2016 as per Competition Act 2012 and finally they have drafted a regulation as per requirement of the BCC Act.
There are some lacking in the draft "the Bangladesh Competition Commission Combination Regulations, 2025". To align Bangladesh's merger control framework with international best practices (USA, EU, Japan) and to safeguard market competition during the LDC graduation period, while strategically leveraging the demographic dividend (2026-2040) for sustainable and inclusive growth.
Some of the Typical Competition Concerns of M&A which are not included in the draft: Market concentration: Fewer competitors lead to higher prices. Barriers to entry: New firms discouraged. Coordinated effects: Easier collusion among remaining firms. Vertical foreclosure: Rivals denied access to key inputs/distribution. Conglomerate leverage: Using one market's dominance to gain another. Data and digital dominance: Combining datasets reduces consumer privacy and competitive neutrality.
M&A are three categories, (1)on Economic Relationship, (2) on Transaction Form and (3) on Strategy or Motivation. Some of the M&A on economic relationships are: (a) Horizontal Merger between firms in the same line of business (competitors). For example,Coca-Cola and Pepsi (hypothetical). It may directly reduce competition; price increase risk etc.(b) Vertical Merger can be between different firms at different stages of the supply chain (supplier-buyer), For example, Amazon acquiring MGM Studios. It hadforeclosedthe competitors' access to key inputs/customers.(c) Conglomerate Merger occurs between firms in unrelated businesses. For example, Samsung acquiring an insurance company. It had increase portfolio power, cross-promotion, and data leverage.
Based on Transaction Form the M&A are Statutory Merger, Subsidiary Merger, Consolidation, acquisition of assets, and acquisition of Shares. (a) In statutory merger, two firms merge under company law; one entity survives through Transfer of assets and liabilities by operation of law. (b) In Subsidiary Merger, one company becomes a wholly owned subsidiary of another but Separate legal identity keeping retained.(c) In consolidation, two or more companies form a new entity.All prior entities dissolved.(d) In case of Acquisition of Assets, buysmajor assets (such as plants, brands, IP), can control without full ownership, (e ) In case of Acquisition of Shares, one entity Purchase of voting shares giving control (often >50%). It is a very common method of taking over.
M&A regulations exist to prevent the creation or strengthening of market dominance that may harm competition and consumers, while permitting efficiency-enhancing combinations that foster innovation, productivity, and global competitiveness.
In Strategy or Motivation, the M&A can be Synergy Merger, Market-Extension Merger, Product-Extension Merger, Diversification Merger and Congeneric Merger. (a) Synergy Merger plan to Achieve economies of scale or scope (Exxon-Mobil in 1999), (b) Market-Extension Merger toEnter new geographic markets (Tata acquiring Jaguar Land Rover, UK), (c) Product-Extension Merger is for Complementary products in same market (Facebook acquiring Instagram), (d) Diversification Merger is to Spread business risk(General Electric expanding into finance business), and (e ) Congeneric Merger to acquire Firms with related technology or customers (Google acquiring YouTube).
For developing economies such as Bangladesh, merger regulation is vital during the period of LDC graduation and the demographic dividend phase (2040). Effective merger control ensures that industrial expansion, FDI inflow, and corporate restructuring occur within a fair, transparent, and contestable market system that supports sustainable growth.
It may be expected to introduce some of the points of procedure in the regulation to study the application of M&A:
Notification thresholds (turnover or assets and market share of the existing companies and probable impact in the market share of amalgamated company).
Mandatory pre-merger notifications from the companies concerned. Two-phase review system (screening and detailed investigation). Inter-agency coordination with regulators such as BTRC, BSEC, and Bangladesh Bank as they are very important regulators and, in a position, to provide muchinformation.
The draft must include some of the regulations and strategy such as Economic Tests Used in Merger Assessment. For example, Substantial Lessening of Competition (SLC), Significant Impediment to Effective Competition (SIEC), Public Interest Test and Efficiency Defense etc.
"The Competition Commission of any country oversees the M&A. Under Section 21 of the Bangladesh Competition Act, 2012, the Bangladesh Competition Commission (BCC) is empowered to review and control mergers that may adversely affect competition. Bangladesh Competition Commission started the journey in 2016 as per Competition Act 2012 and finally it has drafted a regulation as per requirement of the BCC Act"
A provision of regulation for establishing appropriate notification thresholds (based on turnover, assets, or transaction value) is essential to ensure that only mergers with potential competitive significance are reviewed. If thresholds are too low, regulators become overburdened with minor cases; if too high, potentially harmful mergers may escape scrutiny.
A merger must be notified voluntarily if it meets either condition such as: The merged entity has a post-merger market share of ? 40 %, or the combined market share of the three largest firms (including the merged entity) is ? 70 %, and the merged entity's share is ? 20 %.
Government may consider the issues in order to implement the M&A regulation to ensure competition in the market. Such as: Establish a Merger Control Wing within BCC, staffed with economists, legal experts, and sectoral analysts. Legal Modernization: Harmonize the forthcoming 2025 Regulations with leading jurisdictions to ensure credibility and investor confidence. Digital Market Readiness: Introduce data-driven merger criteria to address platform dominance and cross-market data integration. Inter-Agency Coordination: Build formal channels among BCC, BSEC, Bangladesh Bank, and BTRC for coherent merger oversight. Public Interest Integration: Evaluate mergers on competition grounds first, then consider employment and industrial development benefits transparently. Strategic Alignment (2026-2040): Use merger control as a strategic safeguard enabling beneficial consolidation while maintaining competitive neutrality for domestic entrepreneurs and consumers.
Beyond competition, governments may consider employment, industrial policy, and national security often intersect with merger review.
M&A is beneficial but without appropriate regulations, those may harm the market. Authorities must consider including all the above-mentioned provisions in the M&A regulations 2025, otherwise they cannot face the challenge of anti-competitive merger and acquisition.
The BCC Act 2012 under the section 21 on "Prohibition of Combination", although it should be M&A. The Competition Commission regulates and oversees the M&A but does not prohibit as such. The original may also be revisited.
The writer is CEO, Bangla Chemical
