M&A activities in Asia-Pac dropped 23.1% to US$154.3b

Only 2,462 completed deals.

According to a release by Thomson Reuters, completed M&A activity involving Asia Pacific amounted to US$154.3 billion thus far, a 23.1% decline from the first half of 2012 (US$200.8 billion) as number of completed deals fell 22.9% to 2,462 deals.

Meanwhile, the value of announced M&A deals involving Asia Pacific companies, excluding Japan, totaled US$215.6 billion so far this year, a 8.7% decline from the first half of 2012 (US$236.1 billion), and witnessed the slowest start to a year since 2009 when deal value fell to US$139.4 billion.

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The average M&A deal value for disclosed deals, however, grew higher with US$76.1 million as compared to US$70.6 in the first half of 2012, as deal-making so far this year involving Asia Pacific companies witnessed at least three transactions above US$5-billion announced during the second quarter of this year.

China Remains Most Targeted Nation
M&A transactions targeting Asia Pacific reached US$173.5 billion to date, down 6.0% compared to the first half of 2012 (US$184.6 billion), and the lowest first-half level volume since 2009 (US$123.8 billion).

Chinese companies continued to be the preferred target by both domestic and foreign acquirors with US$76.6 billion, up 17.4% in deal value, and captured 44.2% of Asia Pacific-target M&A activity.

United States is currently the most active non-Asian acquiror of Asian companies with 5.7% market share worth US$9.8 billion.

Energy & Power Sector Takes the Lead
Energy & Power accounted for 16.4% of the acquisitions involving Asia Pacific companies despite the 6.2% decline in deal value to US$35.3 billion compared to the first half of 2012, thus making it the slowest start to a year since 2009 (US$25.7 billion).

Oil & Gas sector grew 18.2% to US$25.0 billion and accounted for 70.9% of Energy & Power’s M&A activity.

Meanwhile, the Industrial sector saw an 82.3% growth as deal value reached US$32.8 billion compared to US$18.0 billion during the first half of last year and captured 15.2% of the market share. This is the highest first-half volume for Industrials since 2011 when deal value reached US$41.7 billion. Consumer Staples and Retail were the other industries that witnessed a significant growth with a triple-digit percentage increase from the first half of 2012.

Private Equity-backed M&A Declines 18%
Buyside Financial Sponsor M&A activity in Asia Pacific reached US$10.4 billion so far this year, an 18.0% drop from the first half of 2012 (US$12.7 billion).

Driven by US-based private equity firm TPG Capital’s acquisition of Ingham Enterprises Pty Ltd for an estimated value of AU$880 million (US$904.1 million) in a leverage buyout transaction, the Consumer Staples sector saw more than a four-fold increase in deal value to US$3.7 billion from the first half of 2012 and accounted for 35.5% of the Private Equity-backed M&A in Asia Pacific.

To date, China is the most targeted nation which accounted for 30.5% of the private equity-backed M&A in the region.

Top Deal: Shuanghui International's Acquisition of Smithfield Foods
Chinese meat producer, Shuanghui International Holdings Ltd, agreed to acquire US-based Smithfield Foods Inc. for US$7.0 billion (including assumed liabilities).

The deal is the largest ever Chinese acquisition of a US company and this year’s top deal involving Asia Pacific M&A. China outbound into US reached a record volume of US$11.1 billion, more than double the US$5.4 billion worth of announced deals during the first half of 2012. Total deal value for China outbound M&A amounted to US$36.3 billion, up 110.7% from the first half of 2012.