Q3 Earnings Alert! Plan early for this week’s stock reports with all key data in 1 placeSee list

Cross-border M&A recovers in Asia as dealmakers look abroad for growth

Published 09/30/2024, 02:09 AM
Updated 09/30/2024, 10:02 AM
© Reuters. FILE PHOTO: People take photos of the skyline during sunset with the Central financial district in the background, in Hong Kong, China March 11, 2021. REUTERS/Tyrone Siu/File photo
ALVG
-
3382
-
RTMVY
-

By Kane Wu and Yantoultra Ngui

HONG KONG/SINGAPORE (Reuters) - Cross-border mergers and acquisitions involving companies in the Asia-Pacific region have recovered this year and are booming in Japan as businesses seek new growth after adjusting to cope with higher interest rates.

The total announced value of such deals rose 25% year-on-year to $286 billion as of Sept. 30, LSEG data showed, with around 80% of them transacted with an entity outside the region.

"There has been a notable pick-up in cross-border transactions as political stability returned to some markets just as pent up demand for investments and dealmaking and adjustments to higher interest rates began to drive M&A activity again," said Andre Gan, a M&A partner at Wong & Partners, a member law firm of Baker McKenzie in Kuala Lumpur.

Overall, Asia M&A totalled $622 billion in the first nine months of the year, down 0.2% from the same period in 2023, LSEG data showed.

The cross-border recovery was partly boosted by a number of mega-deals, including Canadian firm Alimentation Couche-Tard's $38.5 billion all-cash takeover bid for Japanese convenience store owner Seven & i Holdings, the largest announced M&A deal globally this year.

Rupert Murdoch-controlled Australian firm REA Group has also been bidding aggressively for British real estate portal Rightmove (OTC:RTMVY), having sweetened its offer to $8.3 billion after three previous proposals were rejected.

Japan is going to drive the region's multibillion-dollar deals, bankers said, as relaxed corporate governance rules have made its public companies more open to takeovers, while some of the local champions are seeking to expand overseas.

Japan inbound M&A surged more than 16-fold so far this year to a record $74 billion, while outbound deals were up 49% to $50 billion, LSEG data showed.

Texas-headquartered real estate investor Hines, which owned and operated $93 billion worth of assets as of June 30, is actively looking for opportunities globally including Asia, its Asia chief investment officer Ng Chiang Ling told Reuters this month.

Having acquired some assets in Japan and Singapore this year, Hines also sees opportunities in Australia, Ng said.

In Southeast Asia, cross-border transactions are picking up. German insurer Allianz (ETR:ALVG) announced in July that it was planning to buy a majority stake in Singapore's Income Insurance for about $1.6 billion to strengthen its foothold in Asia.

"Looking forward, 50% of the APAC pipeline is made up of global cross-border transactions," said Rohit Satsangi, Deutsche Bank's co-head of M&A, Asia Pacific.

Satsangi said he expected a resurgence of outbound activity by state-owned companies in China that are searching for renewable and natural resources assets globally.

A bounce in China would be welcomed by dealmakers. China outbound deals totalled $14 billion so far this year, down 8% year-on-year and were at the second-lowest level in the last decade, LSEG data showed.

Wong & Partners' Gan said the overall outlook for M&A in the region was expected to improve, including for deals that did not cross borders.

© Reuters. FILE PHOTO: People take photos of the skyline during sunset with the Central financial district in the background, in Hong Kong, China March 11, 2021. REUTERS/Tyrone Siu/File photo

"Heading into 2025 and 2026, considering the recent easing of interest rates by the U.S. Fed and conclusion of the U.S. elections in late 2024, we expect continuing stability to lead to a resurgence of M&A activity," he said.

($1 = 1.2801 Singapore dollars)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.