Southeast Asia M&A sees 49% growth within the first half of the year

Dealmaking pace in APAC is robust except in China.

The Intralinks Deal Flow Predictor, a forecast of future mergers and acquisitions (M&A) announcements, sees a record six-percent increase in the total number of M&A deals to be announced globally within the first half of the year.

Driven by strong performances in India, Southeast Asia, Australia, and Japan, the Asia-Pacific (APAC) region hosted a 44-percent year-on-year (yoy) growth in early-stage M&A activity—the highest level in almost five years. The Financials, Consumer and Retail, and Healthcare sectors are seen to further fuel growth in Q2 2017.

For the third consecutive year, India is the region’s top performer with a 100-percent growth in early-stage M&A activity. “Two key drivers are accountable for this phenomenal growth: Indian corporates looking outside of their home market for deals on one hand and the attractiveness of the Indian market for overseas acquirers on the other,” said Pramod Bhandan, Head of M&A and Capital Markets Transactions at Indian-based oil and gas company Essar Oil.

The next best performer is Southeast Asia (49%), followed by Australia (47%) and Japan (33%).

Meanwhile, after a record US$248.5 billion of overseas acquisitions in 2016, China is expected to slow its dealmaking pace in 2017. Chinese outbound M&A deals last year received backlash from protectionist sentiments, such as in Germany for the acquisition of semiconductor equipment manufacturer Alxtron and in Netherlands for Lumileds, the LED lighting subsidiary of Philips.

The Chinese government is further expected to stem capital outflow under the guise of overseas acquisitions by the dealmakers.

The Intralinks Deal Flow Predictor forecasts the number of future M&A deal announcements by tracking early-stage M&A activity—sell aside M&A transactions across the world that are in preparation or have reached the due diligence stage. These early-stage deals are, on average, six months away from their public announcement.