Mergers and Acquisitions of the first half of 2012

Posted on July 16, 2012 at 6:07 PM

Though the first half of 2012 proved to be disappointing for Mergers and Acquisitions activity, there seems to be signs indicating there can be a significant rebound in prospering sectors. For example, while Asia Pacific M&A fell 5.9 percent outbound M&A from China increased 16.7 percent with a majority of investments occurring in the energy and power sectors. Not only is the energy and materials sector relatively strong, but the retail sector is prospering as well with at least half a dozen deals worth over $1 billion. Fresh investments in the industrial and chemical markets resulted in an increase of transaction activity with the aggregate deal value reaching $345.7 billion, the highest since 2007. The Asia-Pacific region surpassed Europe to become the second largest buyer’s market after North America, accounting for a 29 percent share of global industries and chemicals M&A activity. Automotives saw an increase of 20 percent with 345 deals worth $31.3 billion. The global shipping industry could see more mergers in coming years as overcapacity and weak freight rates force firms to consolidate to save costs. M&A POSITIONS AVAILABLE NOW!!![click to view] HK, Beijing, Shanghai, Tokyo

Asia remains the world’s top mid-market M&A arena; outbound Chinese acquisitions strengthening in 2011 and continuing to grow in 2012 with Chinese bidders taking an active interest in snapping up troubled European assets. The consumer business and transportation sector made up the single largest proportion of outbound M&A flows by sector, accounting for 30 deals worth $3.4 billion. At the same time, more than one quarter (28%) of all outbound deals by volume focused on acquiring US and Australian targets. Although India had weaker outbound deal figures, its inbound deal figures seemed promising with heavy US and Japanese investments. Japanese acquisitions in India resulted in 16 deals, worth $973 million.

Japan proved to have a resilient economy, having been only mildly impacted by the Tohoku earthquake and tsunami. Despite the blow the earthquake dealt to local M&A markets, domestic consolidation opportunities are still strong across the country. Outbound activity continued to strengthen in 2012, facilitated by a strong Yen and driven mainly by local cash-rich corporates’ desires to expand their share into new growth economies chiefly located in Southeast Asia. Southeast Asia (Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam) saw an increase in the outbound deals flow and more than one in seven Asia-Pacific mid-market M&A acquisitions were conducted in this region. Indonesia and Malaysia saw huge pickups and Indonesia has become one of the top 5 markets preferred globally. North Asian (South Korea, Japan, China) companies will lead a wave of acquisition activity out of the region.

According to the Thomson Reuters report, newly formed King & Wood Mallesons took out the top spot for the first quarter of 2012 in completed M&A deals while Gilbert + Tobin and Freehills came in second and third. However, in terms of announced deals, Freehills leads the charge, followed by KWM and Allens. Freehills topped the Merger-market legal advisor league tables for the previous financial year in both value and deal count.

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