TheEdgeMarkets.com reported that M&A activity in Southeast Asia slowed in the primary nine months of 2018 as volatile markets and U.S.-China trade tensions dampened sentiment
There were 301 transactions (321 by September 2017) with a complete value of USD 43.48 billion, down 21.3% year-on-year. The highest activity was recorded in Singapore.
Here are the main points:
Meanwhile, CNBC International quoted Citi’s ASEAN Corporate and Investment Banking Director David Biller as saying that despite the uncertain outlook for the near term, deal activity is anticipated to proceed within the region, particularly in sectors equivalent to consumer goods, technology and telecommunications.
“We are also increasingly seeing an increase in cross-border activity, and this trend is expected to continue in the future as large local companies seek regional expansion and regional leaders seek globalization,” he said.
In Singapore, which has a well-developed and liquid public stock market and a well-established M&A system, Biller expects “opportunistic deals” to proceed despite higher valuations, suggesting that firms will proceed to pounce on value deals.
Malaysia, which elected a brand new prime minister a number of months ago, is anticipated to see an increase in deal activity, while Indonesia is seeing growing interest in “minority-focused, pre-IPO type private market activities.”
Another opportunity which will materialize within the region is the restructuring of conglomerates.
“The reasons for having a multi-industry company are becoming less relevant,” Biller said. “There is real value that can be created through spin-offs or similar types of portfolio restructurings, particularly in some of the family-owned, multi-industry companies that are common in Southeast Asia.”
Source: The Edge Malaysia and CNBC International.
