Name: SCMP
Telephone: +852-2680-8888

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

knowledgeQuestion

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Laura He

Global deal making activity declined in a chilly first quarter, with Asia hit especially hard by the ongoing US-China trade war, growing economic headwinds and market volatility, according to separate reports from data providers Mergermarket and Dealogic on Wednesday.
The number of mergers and acquisitions (M&A) declined by 30 per cent globally to 3,558, while the value of deals declined by 15 per cent to US$801.5 billion, data compiled by Mergermarket showed.
Large cross-border deals that propelled M&A activity in the past five years “have almost disappeared”. Only nine mega deals – defined as above US$10 billion in value – have been struck, down from 14 in the same period last year.
Cross-border M&A made up only 30.8 per cent of the global pool, lower than an average of 38-40 per cent over the past three years.
Asia, especially China, has been hit hard.
Rising protectionism, concerns about technology’s reach are politicising, delaying merger reviews, lawyers say
“The US-China trade war, domestic deleveraging efforts [in China] and increased regulatory scrutiny have made fundraising for private equity and venture capital more challenging,” Riccardo Ghia, research editor for Asia-Pacific at Mergermarket, said in the report.
M&A activity in Asia-Pacific, excluding Japan, nosedived in the first three months to 666 deals worth US$119.9 billion, their lowest value in five years. Deal value in China, which accounted for 46.6 per cent of the Asian market, almost halved.
Asia-Pacific outbound activity collapsed to levels not seen in more than six years.
Global health care deals expected to top US$400 billion this year, says law firm Baker McKenzie
Private equity firms also felt the squeeze, with buyouts plunging to 66 deals worth US$8.7 billion, their lowest value since the first quarter of 2013.
Dealogic too noted the sharp decline in M&A activity in Asia. “With rising protectionism in the region”, the value of deals plunged by 26 per cent in the first quarter to US$180.2 billion, the company said in its report.
In China, deal values and valuations have both declined. China-targeted M&A activity only reached US$77.8 billion, down by 35 per cent from the same period the previous year.
Japan outpaces China in race for outbound mergers as trade war, capital controls weigh on deal flow
The valuation of China-targeted M&A activity has been declining for two consecutive years, with the ratio of median enterprise value and Ebitda dropping to 17.8 times in the first quarter of 2019, its lowest since 2014, when it stood at 17.7 times. The ratio compares a company’s enterprise value to its earnings before interest, taxes, depreciation and amortisation.
But there are reasons for optimism for the rest of the year.
Beranger Guille, global editorial analytics director at Mergermarket, said: “With pockets of consolidation in some particularly hot sectors, vigorous private equity activity and a healthy domestic deal flow in the US should give hope to deal makers for the rest of 2019.”
Analysts at Dealogic forecast more mega deals in the coming months, with valuations already at low levels.
M&A valuations have seen a gradual decline, with the ratio of median enterprise value and Ebitda multiples globally falling to their lowest level since 2012, at 12.01 times.
“This fall in valuation could be enough to reignite M&A fires and tempt investors into a wave of M&A deal making over the coming months,” said Dealogic.


China’s Fosun in talks to sell stake in Club Med to Singapore’s CapitaLand

PwC invests in ‘high quality’ China business to ensure survival after US$62 million fine

UK watchdog shows Vodafone-Three merger a path forward despite competition concerns

US private-equity firm L Catterton invests in Stenders as China’s consumer trends shift

Mergers & Acquisitions

Global M&A hit hard in first quarter, with trade war and cooling growth taking toll on Asia

M&A activity in Asia-Pacific, excluding Japan, nosedived in the first three months to 666 deals worth US$119.9 billion, their lowest value in five years. Photo: AP

As M&A deals for Hong Kong insurers triples in 2017, all eyes are now on MetLife

It has been recently reported that MetLife Hong Kong’s US parent is seeking close to US$600 million for the arm. Photo: SCMP

graphic for online

epa04464755 AXA Bank logo at the AXA Bank Europe headquarters in Brussels, Belgium, 26 October 2014. Twenty-five eurozone banks failed a stress test intended to gauge their financial stability, the European Central Bank (ECB) said 26 October 2014, adding that nearly half of those must raise 10 billion euros (12.7 billion dollars) in the next nine months. Twelve banks have already raised 15 billion euros in capital to adjust their balance sheets in 2014. A total of 12 European banks need to raise 10 billion euros jointly to recapitalize within the next six to nine months to meet the European Central Bank (ECB) requirement. They are expected to submit recapitalization plans to the ECB within two weeks. EPA/JULIEN WARNAND

Chinese companies pivot in overseas M&A activity, targeting healthcare, hotels and other value-added industries

Chinese companies are refocusing their attention on higher value companies when seeking to acquire foreign assets. Photo: AFP

Chinese companies well positioned to fulfil ‘going out’ strategy amid continuing global M&A boom

FILE - In this Dec. 9, 2015 file photo, the company name of Dupont appears above its trading post on the floor of the New York Stock Exchange. Stocks of companies that make basic materials ended 2015 lower. (AP Photo/Richard Drew, File)

FILE - In this Tuesday, Oct. 13, 2015, file photo, drinks sit on the bar in a pub in London. In 2015, the world's top two beer makers agreed to join forces to create a company that would control nearly a third of the global market. AB InBev's brands include Budweiser, Stella Artois and Corona, while SABMiller produces Peroni and Grolsch. (AP Photo/Kirsty Wigglesworth, File)

FILE - In this Wednesday, Oct. 16, 2013, file photo, trucks drive in front of Teva Pharmaceutical Logistic Center in the town of Shoam, Israel. Israel's Teva Pharmaceutical Industries Ltd. said it is purchasing Dublin-based Allergan PLC's generic pharmaceuticals business for $40.5 billion, in what Israeli analysts called the largest-ever acquisition by an Israeli company. Companies around the world spent a record $4.93 trillion on acquisitions in 2015, according to Dealogic, as slow worldwide economic growth and low interest rates pushed companies to combine forces. (AP Photo/Dan Balilty, File)

FILE - This Tuesday, April 29, 2014, file photo shows a display of Kraft Velveeta rotini and cheese at a grocery market in Pittsburgh. Heinz Co. is buying Kraft Foods Group Inc., creating what the companies say will be the third-largest food and beverage company in North America, the companies announced in 2015. (AP Photo/Gene J. Puskar, File)

In this file photo, the company name of Dow appears above its trading post on the floor of the New York Stock Exchange. In December 2015, Dow Chemical and the DuPont announced they will attempt to merge in an all-stock deal that would create a colossal chemical producer worth $130 billion, before splitting into three separate companies. Photo: AP

Business

Banking & Finance

Money

Markets & Investing

China Business

News

World

Deal value in China, which accounted for 46.6 per cent of Asia market, almost halved in first three months
China-targeted M&A activity only reached US$77.8 billion, a decline of 35 per cent


Global deal making activity declined in a chilly first quarter, with Asia hit especially hard by the US-China trade war, growing economic headwinds and market volatility, according to Mergermarket and Dealogic.


Global M&A hit hard in first quarter, with trade war and cooling growth taking toll on Asia

Deal value in China, which accounted for 46.6 per cent of Asia market, almost halved in first three months China-targeted M&A activity only reached US$77.8 billion, a decline of 35 per cent

Deal value in China, which accounted for 46.6 per cent of Asia market, almost halved in first three months

China-targeted M&A activity only reached US$77.8 billion, a decline of 35 per cent