Asia-Pac M&A up despite global market slump

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Cross-border M&A activity remains stifled as political and macroeconomic uncertainty continues to plague the business world, according to a new report released by Baker & McKenzie.

But the Asia-Pacific region has fared well compared to other regions, with values up 30% on the same quarter last year and up 67% from Q2 this year.  While the report said Japan has been the most active Asian buyer by value, China is on pace for a record year in outbound M&A deal value.

Growth in Asia Pacific has been driven by China as it looks beyond its’ shores to Europe and US for investment purposes,” Australia M&A head Steven Glanz told Australasian Lawyer.

“The story from both China and other countries such as Japan has been heavily weighted to outbound investment activity.”

Globally, he overall value of cross-border deals last quarter dropped a whopping 22% compared with the same quarter last year.  But valuations are up 64% quarter on quarter this year, the report, using a baseline score of 10, estimates that cross-border M&A is up 23% from the previous quarter but down 10% from the same quarter last year.

It’s the infrastructure, property and agribusiness that are the hot areas and Glanz said lawyers should be gearing up to service clients in these sectors.

“Clients want lawyers who intimately know their businesses and how their industry operates; understanding the unique challenges posed by their particular sector,” he said.

“The M&A Index for Q3 really underlines the importance for lawyers to understand industry sectors and what matters to the businesses within them.”

As for the next 12 month period, Glanz is cautiously optimistic.

“Steady as she goes,” he said.

“While of course the US elections and Brexit will have an impact, I am optimistic that the Australian legal market will be busy with appetite for cross-border deals underpinning globalisation and the search for growth beyond national borders.”