The Asia-Pacific (APAC) region witnessed a significant 28% quarter-on-quarter (QoQ) decline in mergers and acquisitions (M&A) deal value to $105.9 billion during the first quarter (Q1) of 2023. Economic uncertainties, geopolitical tensions, and stricter regulations have exerted an impact, shaping the M&A landscape in the region, according to the latest M&A report from GlobalData, a leading data and analytics company.

GlobalData’s latest report, “Mergers and Acquisitions Deals by Top Themes and Industries in Q1 2023 – Thematic Intelligence,” reveals that M&A deal volume too suffered a 18% QoQ drop to 1,710 deals during the quarter.

Priya Toppo, Thematic Intelligence Analyst at GlobalData, comments: “Factors such as economic uncertainties, geopolitical tensions, and the implementation of stricter regulations in certain countries have collectively contributed to this decline, highlighting the complex landscape businesses are navigating in the region.”

Deal value in APAC, excluding China, dropped to $78.8 billion in Q1 2023, a 9% decline compared to the $86 billion deal value in Q1 2022. Deal value in China in Q1 2023 fell to $27 billion, a 16% decline from $31.5 billion in Q1 2022.

Toppo continues: “The APAC region market has weakened in Q1 2023, lower than every quarter in 2022. The declines to date have not been so steep, but the outlook remains uncertain and deal activity is likely to remain subdued over the rest of 2023 in the region.”

The report notes that out of 19 sectors, three sectors—Automotive, banking & payments, technology, media and telecom (TMT) have reported a quarter-on-quarter increase in deal value in the APAC region and the remaining saw a drop.

In fact, three of the global top 10 megadeals were witnessed in the APAC region– TBJH acquisition of Toshiba for $15.1 billion in Japan, Queensland Government acquisition of CopperString 2.0 Transmission Project for $3.3 billion in Australia and Kayan Hydropower Nusantara acquisition of Mentarang Induk Hydroelectric Power Plant for $2.6 billion in Indonesia.

Toppo concludes: “Despite a decline in deal activity during the quarter, the APAC region witnessed increasing use of technology. The region has been a hotbed of innovation in recent years, particularly in areas like fintech and e-commerce. As these industries continue to grow and mature, there could be more opportunities for M&A deals in the region.”