According to Mergermarket, the world’s leading news outlet about mergers & acquisitions, private equity (PE) investment has been growing throughout the year, from US$67 million to US$1.3 billion in Q1. The majority of PE investments in Q1 were concentrated on the real estate sector, with three transactions totaling US$1.1 billion.
M&A activities throughout Southeast Asia suffered a slow down during the first half of the year despite recording the highest value during the first quarter in terms of the statistical history of Mergermarket Company.
This can be put down to the impact of the novel coronavirus pandemic which halted many transactions which were scheduled to take place in the second quarter.
According to a trend summary report released by Mergermarket, M&A activities in the region generated US$29 billion, with a total of 149 transactions in the first quarter of the year, representing a drop of 12.5% in value compared to the same period in 2019 which saw 186 transactions valued at US$33.1 billion. The region accounts for 11.5% of Asia-Pacific’s total value, which saw 1,734 transactions worth US$ 250.8 billion.
M&A transactions among regional nations remain in full swing and currently dominate the market, with an agreement value of US$23.9 billion over 85 transactions, representing an increase of 20.2% in agreement value per year.
Most notably, Singapore remains the largest M&A market in terms of its transaction value, with a total of US$11.9 billion through 41 transactions, closely followed by Thailand with US$11.1 billion through 18 transactions.
In line with these statistics, Mergermarket predicts that M&A transactions ahead in the second half of the year will be reduced as companies are anticipated to retain greater amounts of cash on their balance sheets in an effort to deal with uncertain economic conditions.