Asia-Pacific M&A accelerating

Added 23rd September 2015

Outbound M&A announced by Asia-Pacific companies hit $275bn in the past 18 months, and the number and deal size are expected to grow, which bodes well for M&A arbitrage hedge funds.

Asia-Pacific M&A accelerating

According to a report by investment banking firm Baird, the value of Asia Pacific’s outbound M&A deals were up 65% year-on-year in the first half of 2015.

“Outbound M&A activity is increasing, especially from China, which surpassed Japan in outbound deal value in 2013,” said Anthony Siu, head of Asia investment banking.

China’s state-owned enterprises used to be the major force in the country’s outbound M&A deals, mostly in the natural resources sector, now there are more privately-owned enterprises looking to acquire high, value-added businesses, as they seek to globalise and reposition themselves along the value chain, the report said.

Asia’s M&A activity in in line with a global trend. Low interest rates and robust CEO confidence, particularly when they see their peers boosting share prices through M&A, have created conditions for consolidation, said Lawrence Jones, managing director and head of Paulson Asia, an affiliate of Schroders, who runs a merger arbitrage fund.

Jones told FSA in a previous interview that opportunities have also emerged because investment banks have pulled back because regulations in many jurisdictions limit their proprietary trading.




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