The Asia-Pacific M&A market is likely to continue to benefit Australasian firms with exposure to Asia, according to a leading corporate lawyer.
Herbert Smith Freehills
partner Rebecca Maslen-Stannage has stated that 2014 ended as a ‘very strong year’ for M&A across the region.
She said that deal values had managed to break previous records and that deal volumes had returned to reach pre-GFC highs.
“This resurgence has fostered substantial market confidence and created a positive outlook for the year ahead,” she said.
Maslen-Stannage said the ‘flurry’ of deal activity kept dealmakers busy ‘right until the final days of the business year’. “A number of significant transactions signed only days before Christmas,” she said.
“Looking ahead, we expect the flow of transactions to continue as businesses throughout the region maintain their focus on strategic growth,” Maslen-Stannage said.
According to Herbert Smith Freehills, the total value of deals in the region surged to US$743.9bn, a 62% increase on the previous year and the region’s strongest annual period by value for over thirty years.
The firm said financial buyers played a critical role in the region last year, investing $60.024 billion, up from $33.422bn in 2013. Energy and power assets were the most highly valued targets, with $33.164bn spent on companies in the sector compared to only $12.913bn in 2013.
The ‘impressive comeback’ is likely to continue this year.
“The outlook for M&A is particularly strong in developing markets in South East Asia where governments have implemented significant infrastructure programs and continued consumer demand from the growing middle classes will drive activity,” Maslen-Stannage said.
Asia corporate practice head Austin Sweeney said steady levels of activity were seen in most jurisdictions last year, and in particular Chinese and Japanese acquirers had ‘a busy year.’
According to Thomson Reuters, China remained the most targeted nation in the region last year, with US$390.4bn of value.