The Asia-Pacific (APAC) region witnessed a 25% year-on-year (YoY) decline in deal activity during January to May 2023, in line with the global trend of economic uncertainties impacting deal activity. The decline was seen across all types of deals (mergers & acquisitions, private equity, and venture financing deals) and major markets in the region, reveals GlobalData, a leading data and analytics company.

An analysis of GlobalData’s Financial Deals Database revealed that 5,707 deals  were announced in APAC during January to May 2023, compared to the 7,604 deals announced during January to May 2022.

Aurojyoti Bose, Lead Analyst at GlobalData, comments: “Deal activity in APAC region declined considerably as several economic headwinds have been impacting the investors’ decisions. The major reasons behind the decline include geopolitical tensions, inflation, and recession fears.”

The number of M&A deals declined by 16% YoY during the first five months of 2023 while the volume of private equity and venture financing deals fell by 15% and 32%, respectively.

Bose continues: “Several key markets in the APAC region experienced decline in deal activity during January-May 2023. In fact, China which is the top APAC market in terms of deals volume, registered a YoY decline of 15% in the number of deals announced during the period.”

Deal volume in other key APAC markets such as India, Japan, Australia, South Korea, Singapore, Malaysia, Hong Kong, Indonesia and New Zealand also YoY declined by 36%, 19%, 23%, 40%, 29%, 10%, 33%, 43% and 40%, respectively, during the January to May 2023.

Bose concludes: “Deal sentiment across the word is of cautious tone, and APAC is not an exception, as bearish market environment is weighing on investors’ appetite for deal making. GlobalData expects the prevailing market volatility and geopolitical tensions to force prospective investors to carry out more rigorous due diligence in their hunt for deals.”