M&A activity in Asia-Pacific remained inconsistent during Q1 2020, finds GlobalData

The mergers and acquisition (M&A) deal activity in the Asia-Pacific (APAC) region remained inconsistent during the first quarter (Q1) of 2020, according to GlobalData, a leading data and analytics company.

An analysis of GlobalData’s Financial Deals Database reveals that the number of announced M&A deals decreased from 494 in February 2020 to 457 in March 2020 while at the same time the deal value increased from US$24.1bn to US$28.6bn.

Aurojyoti Bose, Lead Analyst at GlobalData, comments: “Asia-Pacific witnessed growth in deal value in March, mainly due to one high value deal announced during the month, excluding which deal value too declined. The subdued deal activity could be attributed to acquirers adopting a cautious approach due to COVID-19 outbreak.”

The announcement of the acquisition of Tesco’s operations in Thailand and Malaysia by Charoen Pokphand for US$10.6bn during March 2020 raised the total value for the month.

In terms of deal volume, Japan occupied the top position with 317 M&A deals (accounting for 22.7% of total APAC deal volume) while China took the top spot in value terms with US$16.5bn (accounting for 19.5% of total APAC deal value) in Q1 2020.

In volume terms, the top five countries (Japan, China, Australia, India and Singapore) accounted for around 75% of total deal volume, whereas the top five countries (China, India, Japan, Hong Kong and Singapore) in terms of value accounted for around 67% of total deal value.

However, most of these top markets have been losing value share to other regions. Interestingly, the deal value share for other APAC countries increased from 27.6% in February to 56.2% in March.

Bose concludes: “Going forward too, deal activity is expected to be subdued for few more months with April 2020 already starting on a slower note. However, with key markets such as China starting to return back to normalcy, deal activity in the region is likely to make a rebound relatively faster compared to other regions.”

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