M&A deals in Asia-Pacific hit 4-yr low in Jan-Mar 2013

M&A deals worth $83.8 billion were announced in the same period last year

Merger and acquisition (M&A) activity in the Asia Pacific region, including India, hit a four-year low in the first three months of 2013, as deal value declined over 23% to $64.5 billion, says a report by deal tracking firm mergemarket.

M&A deals worth $83.8 billion were announced in the same period last year.

According to the report, M&A deals announced during the January-March period of this year in the Asia-Pacific region (excluding Japan) fell to 453 worth $64.5 billion from 484 deals in the year-ago period.

This was the lowest since Q1, 2009, when deals worth $45.8 billion were announced.

Moreover, the total deal value tumbled 27% from $88.4 billion (via 632 deals) in the fourth quarter of 2012, giving little confidence for investors in the region going forward, the report said.

The biggest transaction of the quarter was in the energy sector, wherein SapuraKencana Petroleum acquired the tender rigs business of Seadrill, followed by the cross-border deal between Malaysia and Singapore valued at $2.9 billion.

A sectorwise analysis shows that energy, mining and utilities played the largest part in deal making, with $19.3 billion worth of deals accounting for 29.8% of all Asia-Pacific (excluding Japan) targeted M&A.

Inbound deals into Asia-Pacific were up from $9.5 billion (121 deals) in Q1 2012 to $13.1 billion (122 deals) in Q1 2013, but were down compared to $17.6 billion (135 deals) in the last quarter (October-December) of 2012.

Outbound activity saw a decline in momentum. A second consecutive quarterly decrease brought down deal value by 13% to $17 billion (68 deals) from Q4 (88 deals worth $19.6 billion). It was however slightly above a full Q1 2012 ($16.5 billion, 83 deals).

China remained the most attractive target (inbound and domestic) in the region, with 142 deals worth $26.3 billion being announced, although the value of Chinese M&A was down by 26.3% compared to the same period last year.