In this blog series, we’ve been analysing the M&A transactions across different regions across the globe. Last week, we discussed transactions in the Middle East and Africa and in this edition of the series, we will cover the M&A activity in the Asian/Pacific region.
A brief overview of M&A (mergers and acquisitions)
Mergers refer to an agreement that unites two existing companies into one new company, where as an acquisition is a corporate action in which one company purchases most or all of another company’s shares to gain control of that company.
M&A Transactions – Asia/Pacific region
As 2019-2020 saw global issues, it was not surprising to be able to note a similar trend to other regions, previously discussed. Many regions such as the Middle East and Africa, Europe and the Asian/Pacific regions showed a favouring of quality over quantity of M&A deals.
With the number of M&A deals falling 6.7% whilst the value climbed by 29.7%, it was clear this trend continued near and far across the globe. It was clear that firms shifted their focus away from recording a high number of deals, to finding larger and higher value deals. Whilst the region saw 2015 to have the highest annual value of deals, 2020 saw the largest year-on-year increase in terms of value.
What was most interesting to analyse was the disparity between the industries within the region. Whilst Industrials and Chemicals and Financial sectors reported a decline in deal value, 20% and 7% respectively, the Energy and Mining sector along with the Technology sector noted 176% and 51% increased in deal value.
M&A Transactions – Japan
Keeping it separate to the region, Japan saw similar results to the rest of the region favouring quality deals over sheer quantity. However, success within the sectors differed. Industrials and Chemicals and Technology declined by 28% and 37%, respectively, in terms on value. Conversely, Financial services and the Consumer sector surged by 394% and 127% in terms of value. Quite a mixed bag for Japan, but this shows the opportunity for growth within the country!
So it wasn’t all doom and gloom in the Asia/Pacific region as it very much mirrors the global trends and global circumstances.
Stay tuned for next week, which will be our last edition of this series, Global M&A actvity.
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To read more from the series, click here!