M&A activity in APAC region sees record dip in Q1

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Merger and acquisition (M&A) activity in the Asia-Pacific region, excluding Japan, has recorded a 2.5 per cent decline in the first quarter of 2020 to $189.6 billion, the lowest Q1 deal value since 2014, according to a data by Refinitiv.

The number of announced deals also fell 17.6% from Q1 of 2019 due to the challenging deal environment across the region, especially China.

“China has been one of the very active markets when it comes to deal-making for the previous years, but in the past few years, we’ve seen a decline in China,” said Elaine Tan, Refinitiv’s Senior Analyst, Deals Intelligence.

The factors that have contributed to slower deal-making in China include regulatory hurdles, uncertainty over the US-China trade spat as well as the recent COVID-19 pandemic outbreak. Also, the APAC region is witnessing deal activity slowing down in the first quarter on account of the Chinese New Year holidays.

Refinitiv also noted the M&A activities involving China has declined 11.5 per cent from Q1-2019, with total valuation at $87.4 billion. This also shows the slowest M&A activity since 2014, Tan said. Meanwhile, China’s outbound acquisition stood at around $2.2 billion, 81 per cent lower than a year ago, marking the lowest Q1 record since 2005.

“China, a big player in outbound cross border M&A, fell further down the rankings to around 17th as the most active nation for global cross-border activity this year, after being one of the largest suppliers of overseas assets during its peak in 2016,” Tan said.

The data also shows that there were no announced deals with more than $500 million value in Q1-2020 while there were around three deals with a valuation of $1 billion last year.

The uncertainty with the onset of the global coronavirus pandemic has weighed down on corporate deal-making activity, she added.

According to Refinitiv’s end-2019 survey, dealmakers expressed optimism about M&A activity in 2020. However, the unforeseen economic events triggered by the pandemic have brought uncertainty to the deal-making environment.

Nevertheless, the healthcare sector is seen to record increased activity in the current situation. “Maybe not as big as the other sectors, but when we were looking at some of the industry trends for Q1, it will (also) depend on each sub-region in Asia,” Tan said.

 

 

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.