Singapore’s M&A momentum drops in 2016: KPMG

M&A word scrabble

Singapore has seen a drop in M&A in 2015, with declines in both overseas acquisitions and domestic activity for the city-state.

However the capacity to fund M&A growth is expected to rise 15 per cent in 2016 among Singapore-based companies, according to Benjamin Ong, head of mergers & acquisitions and capital advisory at KPMG Singapore

In 2015 overall activity plummeted by 35.9 per cent in deal value from the previous year’s record annual volume.  Financially fit, Singapore companies are positioned to pursue M&A deals. The unified ASEAN Economic Community, is poised to boost Singapore M&A activity in 2016.

Contrasting with Singapore’s decline in M&A activity last year, Asia Pacific (APAC) deal making hit the $1 trillion mark in 2015, driven by conglomerate restructurings, divestments, reverse takeovers and acquisitions overseas.

The APAC region also witnessed a wave of mega deals over $5 billion, the highest percentage since 2000. As such, M&A is likely to be high in 2016, driven by further technological disruption pursuing companies to form strategic acquisitions, among other M&A strategies.

Also Read: China’s $157b overseas M&A binge comes at lowest costs in four years

Europe’s boutique firms stealing M&A market share from top global i-banks

M&A in Q4 2016 to be flat in Asia Pacific: Intralinks

Chinese companies in the industrial and tech sectors are looking for deals overseas in order to improve quality of manufacturing and environmental standards. However, such transactions have faced obstacles of a political nature.

The capacity of corporates to fund M&A growth is expected to rise by 13 per cent. Healthy balance sheets and strong liquidity in debt markets provide optimism, juxtaposing increased uncertainty felt towards the Chinese and global economy, increase in US interest rates and oil price depression. But economic slowdown could also lead to the provision of new M&A opportunities in the region.

Growth through acquisition, divesting underperforming assets and industry consolidation in the APAC region has seen a 55 per cent increased from 2014 to 2015.

China outbound activity accrued $76.5 billion worth of deals, through purchasing European and North American assets to counter losses in domestic growth levels. China’s slowdown did not seem to dampen its M&A appetite for Singapore and southeast Asia as it was the largest investor in the region.

The APAC outpaced Europe in terms of value and percentage of total M&A for the first time in history.  Despite the presence of supportive factors (i.e. Chinese capital) some analysts expressed doubt over whether M&A deal flow and activity in 2016 can surpass or even repeat the highs in Asia Pacific M&A activity observed in 2015.

Also Read

Singapore: Teads closes $47m debt financing, plans Asian expansion via M&A

Singapore 2015: The year of M&A with 90% uptick in deal value; Temasek & GIC corner a third of pie

Thai billionaire’s F&N chases M&As with $745m warchest, to up share in SE 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.

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.