Asia-Pac M&As rise to $673.5b in 2017 led by real estate even as global deal activity slows

Kuala Lumpur, Malaysia. Photo: Pixabay

Mergers and acquisition activity in the Asia-Pacific (APAC) region, excluding Japan, recorded a 4.5 per cent increase in transaction value at $673.5 billion across 3750 deals in 2017, a recent report of Mergermarket revealed.

In contrast, global M&A fell just short of previous years as uncertainty appeared to take its toll on investments. Global  M&As dipped 3.2% to $3.15 trillion across 18,433 deals compared with $3.26 trillion across 18,592 deals in 2016. The Walt Disney Company’s acquisition of Twenty-First Century Fox Inc’s entertainment assets was the largest deal of the year worth $68.4 billion.

Global & Regional Asia Pacific (excl. Japan) Analysis | Q4 2017 | Mergermarket

APAC remained steady in 2017, hitting 21.4% of global M&A, with China representing the vast majority of the region’s activity, at 49.1% by value, the report said.  In 2017, the US accounted for a 40.2% share of the global value, the lowest percentage since 2012 at 37.6%, a decline from the 45.5% in 2016 and the second consecutive decrease. Meanwhile Europe saw a second successive growth to 29.6% in 2017, up from 25% and 23.1% in 2016 and 2015 respectively.

“The next wave of technology is driving M&A across all sectors as people change the way they consume media, products and services,” said Jonathan Klonowski, Research Editor (EMEA) at Mergermarket.

Global & Regional Asia Pacific (excl. Japan) Analysis | Q4 2017 | Mergermarket

The largest M&A deal in APAC in 2017 was the $24.6 billion acquisition of Australia-based retail property group Westfield Corporation by Unibail-Rodamco, the France-based commercial property operator. Real estate was the best performing sector in the region with 184 deals worth $121.7 billion, a 2.9x increase by value over 2016 that witnessed when 113 deals worth $41.4 billion.

The strong growth was due to six deals worth more than $5 billion, including Unibail-Rodamco’s $24.6-billion acquisition of Westfield, and the $21.2 billion spin off of The Wharf Holdings’ Hong Kong-based property investment business.

Global & Regional Asia Pacific (excl. Japan) Analysis | Q4 2017 | Mergermarket

The consumer sector dominated the year’s deal tally accounting for 386 transactions worth $63.3 billion in 2017, a 71.8% increase over 2016. South Korea, with 57 deals worth $10.4 billion, became the second most-active country in terms of both deal value and count after China (111 deals worth $21.1 billion), accounting for a 16.4% share of the region’s consumer M&A activity.

Inbound activity intensified in 2017 and was up 21.9% to $107.6 billion across 603 deals compared with $88.3 billion across 585 deals in 2016, marking the highest value. Australia remained the most targeted country within the region in terms of both inbound deal count and value with the country recording 176 deals worth a combined $41 billion.

On the other hand, APAC outbound acquisitions experienced a sharp 54.1% drop by deal value as a consequence of Chinese authorities heavily regulating the amount of capital invested outside of its shores.

“While raw numbers appear to indicate that efforts to tame Chinese spending overseas may have slowed investment, sentiment to spend outside of its borders remains strong among China-based financiers,” said Amy Wu, Senior Research Analyst at Mergermarket.

China is now urging companies to restrict overseas investments, or only to look outbound if business-critical, with companies having to stress the returns it will bring back to China to gain the greenlight from regulators, the report said.

Private equity investment in the region stood at $122.7 billion across 445 deals in 2017. The value hit the highest annual value on Mergermarket record due to one megadeal – the $15.9 billion buyout of Singapore-based Global Logistic Properties by a consortium led by China Vanke and HOPU Logistics Investment.

Goldman Sachs & Co. led the financial advisor rankings having advised on 64 deals in APAC worth $114.7 billion.

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.