Singapore deal-making registers highest growth since 2014 at 14%

M&A involving Singapore firms reached US$25b.

Mergers and aquisitions in Singapore has gained momentum during 4Q16 as the value of deal making involving Singapore companies reached US$25b, a 38% spike from the previous quarter and a 41.5% increase from last year. According to Thomson Reuters data, this brings overall Singapore M&A so far this year to US$71.3b, up 14% compared to 2015.

"This is the highest annual period since Singapore M&A activity reached a record high in 2014 (US$94.0b) The average M&A deal size for disclosed deals grew to US$126.2m thus far, compared to the US$105.6m in 2015, as more transactions above US$1b were witnessed by Singaporean companies this year compared to the same period last year. Notably, GIC and Temasek also ramped up their acquisitions this year," Reuters noted.

Total cross-border deal activity amounted to US$34.5b year-to-date, which is actually 11.3% less than the same period last year at US$38.9b. The city-state's inbound M&A activity fell 28.3% in deal value compared to last year but outbound M&A activity reached US$19.5 billion, up 8.8%. Domestic M&A activity grew to US$10.7 billion, up 18.3% in deal value from the comparable period last year.

Which sector takes the lead in terms of deal making?

The Energy & Power industry accounted for 31.1% of the market share worth US$21.1 billion, up 263% from 2015. Reuters noted that this is the highest-ever annual period for the sector.

"This was bolstered by the pending stake acquisition in Essar Oil Ltd by Petrol Complex Pte Ltd of Singapore, a unit of Rosneft, and a consortium of Trafigura and United Capital Partners in two separate transactions with a combined value of US$12.9b," Reuters stated, noting that this is the biggest any Singaporean involvement deal so far this year, and the second largest deal on record for overall Singapore M&A activity.

Meanwhile, after taking the top spot last year, the real estate sector fell behind in second place and grabbed 18.9% market share worth US$13.5b, down 21.2% from 2015.

The industrials sector trailed in third place, caputring 14% of the acquisitions of Singapore firms.