(29 June 2021 – Asia) Mergers and acquisitions (M&A) activity is likely to continue its strong start in Asia this year as private equity firms and companies look to make up for pandemic disruption.
M&A activity is off to its fastest start since 2015, with companies engaging in more than 7,300 transactions worth US$570.8 billion in Asia Pacific, excluding Japan, through June 15, according to data from Refinitiv.
There is not likely to be much of a slowdown, particularly in North Asia, as financial markets seem fairly strong, capital is there to deploy and China’s economy is doing fairly well, according to Deutsche Bank head of investment banking coverage and advisory for Asia Pacific Mayooran Elalingam. Interest rates also are not likely to rise in the near term.
“The SPACs (special purpose acquisition companies) are there in every deal that we pitch, sell sides in particular. SPACs are one buyer set. There is a lot more capital outside the SPACs that are faster, bigger and easier solutions,” Elalingam said.
In addition to SPACs seeking targets, private equity firms remain very active, he said. “At least half of deals, there’s a PE [private equity] somewhere. They’re either selling or buying the asset or investing together with somebody.”