Singapore M&A activity underpinned by GIC, with PE/VC on uptick

Singapore skyline. Credit: CapitaLand.

Mega deals involving its sovereign wealth fund GIC helped Singapore drive up M&A activity in Southeast Asia in the first half of the year. Outbound acquisitions dominated activity and investors favoured healthcare and telecommunications firms, shows data by Duff & Phelps.

Singapore recorded mergers and acquisitions totalling $42.6 billion in value in H1, compared to $40.5 billion in the same period last year. About 68 per cent of M&A values originated from outbound acquisitions. Inbound deals accounted for 19 per cent of deal value in H1 this year, and 13 per cent of total deal value came from domestic transactions.

Notable deals backed by GIC in the first half include the $9.1-billion acquisition of Pharmaceutical Product Development and the $2.9-billion buyout of NeuStar Inc. The wealth fund also teamed up with private equity firm Hellman & Friedman in the first quarter to buy a 75 per cent stake in Spain’s Allfunds Bank for $1.9 billion.

Excluding GIC, other significant deal activity included Exxon Mobil’s acquisition of InterOil for $2.5 billion, Mapletree’s acquisition of Student Housing Assets in the US for $1.6 billion and Mercatus’ acquisition of Jurong Point Mall for $1.6 billion.


Credit: Duff & Phelps

Real estate was the most active sector in H1 2017, accounting for 29 per cent of activity, followed by healthcare (~25%) in terms of total value. GIC’s acquisition of Pharmaceutical Product Development LLC – valued around $9.1 billion – made a substantial contribution to the whole. The technology sector saw its share fall to around 10 per cent in H1 2017, compared to 16 per cent in 2016.

Credit: Duff & Phelps

PE/VC investments in Singapore continued the strong growth trend from 2016. The first half of 2017 saw 90 deals with an aggregate value of $3.2 billion – the highest ever value recorded by the city state for a half-year period. Initial public offerings (IPO) saw a sharp decline in value, with 12 IPOs on the Singapore Exchange (SGX) raising $300 million during H1 2017. In comparison, about $1.9 billion in IPO capital was raised in 2016.

Credit: Duff & Phelps

In Southeast Asia, H1 2017 saw the region record aggregate deal activity worth $63.3 billion from 818 deals in M&A, PE/VC & IPO, surpassing the H1 2016 figure of $54.2 billion from 655 deals. There were 11 billion dollar plus deals in H1 2017 compared to eight for H1 2016.

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