Slowdown continues to affect Q3 M&A tally in APAC region

The shadow of the global economic downturn continues to linger over merger and acquisitions, as the Asia Pacific M&A for September quarter saw a fall of 27 per cent over the same period last year in terms of volume.

According to the latest M&A report from global deal tracking firm Zephyr, the third quarter of this year saw deals worth $211,772 million against $166,139 million dollar in the year-ago period.

The M&A value in September quarter has also fallen by 2 per cent from $216,319 million in June quarter this year.

In terms of volume, there was a decline of 22 per cent with 4,464 deals in the third quarter against 5,707 deals in the second quarter this year.

"The third quarter of 2009 brought declines in both volume and value for Asia Pacific – following a pattern of peaks and troughs which has emerged since third quarter of 2008," Zephyr said.

The Chinese energy sector accounted for the largest transaction by value this quarter, followed closely by Japan with a deal valued at $11,400 million while, Australia, Singapore, India, New Zealand and Taiwan all made their presence felt.

Meanwhile, in the private equity scenario, for the third quarter of 2009, there were just 38 transactions aggregating to $1,119 million, representing an 89 per cent slump from $10,535 million in the second quarter of 2009 .

"Deal volume continued to weaken in the third quarter of 2009, deteriorating 44 per cent to 38 transactions – down 74 per cent from the 146 deals signed off in third quarter of 2008," Zephyr added.

Indian and Chinese companies were targeted the most by private equity firms in the third quarter of this year, but South Korea attracted the numero uno position driven by Affinity Equity Partners' stake acquisition in Oriental Brewery from Kohlberg Kravis Roberts for $400 million.

$400 million is almost four times the value of the second-placed deal, which was the institutional buyout of BP's Indian wind power assets by IDFC Private Equity.

Meanwhile, globally the M&A activity in the EU (plus Switzerland) was 129,909 million euro in third quarter of 2009, representing a quarter-on-quarter decline of 18 per cent from 157,650 million euro in the second quarter of 2009.

In the North America region there was a 55 per cent downturn in M&A value quarter-on-quarter with a total of $168,127 million recorded for the three months, against $376,259 million registered in the second quarter of 2009.