APAC M&A activity in first half of 2019 slows to 1,525, lowest since 2013

Merger and acquisition activity in the Asia Pacific region, excluding Japan, moderated significantly during the first-half of 2019, amid an escalating US-China trade and technology war, a Mergermarket report said.

The Asia Pacific region generated 1,525 deals valued at $241 billion in the first half of this year -- the lowest first-half value since 2013.

Moreover, the global market share of Asia Pacific region also shrank to 13.4 per cent from 18.6 per cent during the same period last year.

China's deal value plunged 44.7 per cent in the first half of this year compared to the year-ago period.

India, the second-largest merger and acquisition (M&A) market after China, also performed badly as it registered 52.8 per cent year-on-year decline despite not being directly involved in the US-China trade war, the report said.

The report said the first quarter M&A activity was hampered by cautious approach ahead of general elections, while deal-making failed to gain momentum in the second quarter as well owing to a slowdown in gross domestic product (GDP) growth and domestic consumption.

Notwithstanding the year-on-year decline, India was home to the third-largest deal in APAC, excluding Japan, in the first half of this year - the takeover of troubled Essar Steel India by ArcelorMittal and Nippon Steel & Sumitomo Metal for $6 billion.

Globally, deals worth $1.80 trillion were announced across 8,201 transactions in the first half of this year, down 11 per cent compared to the same period a year ago.

According to the report, "beneath the surface and the headline numbers, deep currents affecting the global economy have started to shift M&A trends in new directions."

Domestic M&A accounted for 67 per cent of the overall activity in the first half of this year compared to a yearly average of 61.3 per cent since 2010, largely owing to heightened geopolitical risks and rising protectionism globally, the report said.

Perhaps, a sign that de-globalisation forces are starting to permeate corporate strategies, several large companies, sometimes under activist pressure, are using M&A to strengthen their grip on their home markets or focus on their core businesses, it added.