The waves of the economy have been stirred by “mergers and acquisitions (M&A).” At times, one institution has emerged as a giant by acquiring a sinking firm; at others, driven by excessive profit ambition, companies have gone on acquisition sprees only to capsize themselves. In Bangladesh’s economy, the merger of five Islamic banks has created a new wave. For years, depositors, employees and shareholders of these five banks lived amid anxiety and uncertainty. The formation of the United Islamic Bank has now appeared as a vessel of possibility for them.
In global commerce, mergers resemble chess moves—win and it is checkmate; make a wrong move and face ruin. Dismissing the fear of failure, high-flying chief executives have become full-fledged players in the “M&A game.” However, wars, conflicts, political aggression and changes in the monetary and fiscal policies of major economies cooled the acquisition frenzy somewhat between 2022 and 2024, according to the Global Mergers and Acquisitions Report 2025 by Bain & Company, a UK-based consultancy firm.
Dealmakers waited for stable markets during those three years. But in 2025, acquirers seem to have unleashed a storm across global markets. From January to November this year, at least ten Mondays began with news of mergers worth more than $10 billion. For this reason, The Economist dubbed Monday as “Merger Monday.”
A survey by the London Stock Exchange Group (LSEG) reported that from January to November 2025, 63 large M&A transactions took place worldwide, each exceeding $10 billion. Of these, 32 corporate megadeals alone accounted for $700 billion in transactions.
Chief executives of various companies have practically gone to war over deals. Union Pacific, an American railroad company, acquired another US firm, Norfolk Southern, for $85 billion—the second-largest megadeal in history. The largest to date was the $90 billion acquisition of United Technologies by defense contractor Raytheon in 2019.
In the entertainment sector, Netflix, Comcast and Paramount Skydance fiercely competed to acquire Warner Bros. Discovery for $60 billion. Meanwhile, through its dedicated M&A unit, Samsung Electronics leveraged artificial intelligence (AI) to outmaneuver rivals in a $74 billion megadeal, reinforcing the South Korean tech giant’s dominance.
Why all this frenzy and bargaining around mergers? High profits, low interest rates, and easy access to new markets entice ambitious CEOs. But does acquisition automatically fill pockets with profits? Professor Clayton Christensen of Harvard Business School answered this question through research on mergers conducted between 2000 and 2011. He found that 70 to 90 percent of companies failed to achieve profit targets even after acquisitions—meaning only 10 to 30 percent succeeded.
Yet no one wants to lose a war—especially a commercial one. And so megadeals have not stopped. Studies have examined the causes of failure. More than a decade has passed since Christensen’s warning. New consultancy firms have emerged; technology has been deployed. Following the sprit “If you fail once, try a hundred times,” the merger wave has grown even more turbulent with time.
The Economist’s business, strategy, innovation, and M&A column “Schumpeter” analyzed the financial performance of companies involved in megadeals over the subsequent five years. The Schumpeter examined 117 megadeals valued at more than $10 billion between 2010 and November 2020, with total transactions amounting to $2.7 trillion. On median, merged companies achieved profit growth of 6 percent over five years, but returns on capital declined by 2 percent.
According to the column, half of the bidders benefited while the other half incurred losses. The successful half increased their market capitalization by $2.8 trillion over five years, whereas the underperforming half saw their share values fall by $2.9 trillion due to inefficiencies and other factors.
A survey by Bain & Company found that companies making at least one acquisition per year between 2012 and 2022 grew revenues at an annual rate of 8.5 percent, compared with 3.7 percent for acquisition-averse firms. However, revenue growth was not driven by acquisitions alone; it also depended on stronger compliance, capacity building, entry into new markets, and opting for multiple small acquisitions rather than a single risky one.
Business models have evolved. AI has created opportunities to cut costs and boost profits. Companies’ capacity to participate in megadeals has increased, as has their ability to take risks by expanding into sectors beyond their core businesses. Yet even in the latest surveys, half of the companies failed to make profits and instead lost capital. Thus, the win–loss risk in M&A remains a 50–50 proposition.
This global wave of merger enthusiasm—with its risks and rewards—has also reached Bangladesh. The country’s largest-ever megamerger, valued at $2.86 billion (Tk 35,000 crore), brought together five Islamic banks to form Sammilito Islamic Bank. The five banks are EXIM Bank, Social Islami Bank, First Security Islami Bank, Union Bank, and Global Islami Bank. Between 2005 and 2023, Bangladesh saw 22 mergers worth a total of $2.50 billion over 18 years, according to a joint research report by EDGE Research & Consulting Limited and LightCastle Partners.
The report notes that the single largest deal during this period was Japan Tobacco’s $1.47 billion acquisition of Akij Group’s tobacco business in 2018. In the same timeframe, two merger deals involving financial institutions, each worth $125 million, were completed. In 2008, ICB Financial Group acquired Oriental Bank to form ICB Islamic Bank. In 2009, Equity Partners Limited (EPL) was acquired by BRAC Bank. In 2016, Robi and Airtel merged in a $12.8 million transaction and continued operations under the Robi brand.
After independence, six state-owned banks were formed through the merger of 12 banks. Later, in 2009, Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha were merged to create Bangladesh Development Bank Limited (BDBL), which has yet to overcome its challenges and achieve sustained success.
More recently, in 2024, Bank Asia acquired Pakistan’s Bank Alfalah for $48.78 million (Tk 600 crore). This year, Akij Group acquired the Janata–Sadaat Jute Mill for $58.94 million (Tk 725 crore).
Globally, strong companies have acquired others; domestically too, healthier firms have taken over weaker or smaller ones. The merger of the five Islamic banks, however, is an exception. Five distressed institutions have been combined to form a single, large-capital entity. Of their total loans, 76 percent are non-performing. About 7.5 million depositors are attempting to withdraw a total of Tk 142,000 crore.
Bangladesh Bank has declared the share value of each Tk 10 par-value share to be zero. With mountains of non-performing loans, capital and provisioning shortfalls, and massive losses, can the merger of distressed and more distressed companies give birth to a strong institution? The experience of Bangladesh Development Bank offers at least a partial answer.
What lies ahead for the country’s highest-value merger? While the merger has provided temporary relief for small depositors, uncertainty remains for others. Still, our hope is that this historic megadeal succeeds and becomes a story of recovery and prosperity.
The writer is the Head of Communication Division, NRBC Bank PLC.
