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M&A activity lowest since 2009

M&A activity lowest since 2009

Merger and acquisition activity has been at its lowest in the Asia-Pacific in the first quarter of this year since third-quarter 2009, a new report shows.

A new Mergermarket report reveals a total of 354 deals worth US$66.6bn were announced in the region, down 23.6 per cent on Q1 2011 (US$ 87.1bn) and 6 per cent on the previous quarter (US$ 70.9bn in Q4 2011). In Q3 2009, there were just $65.4bn worth of deals.

The Mergermarket report shows Asian M&A market continued its downward trend in the first quarter of this year, with total deal value down, compared to Q4 2011, four-fifths in Australia, nearly three-quarters in South Korea, two-thirds in Hong Kong.

China was relatively steady, down just a fraction from US$ 22.5bn to US$ 21.9bn. The growth exception was India, where Sesa Goa’s announced acquisition of Sterlite Industries (India) for US$ 10.3bn, spurred total deal value to increase tenfold compared to the previous quarter.

Asia-Pacific (excluding Japan) inbound cross-border deals in Q1 2012 added up to US$ 10.6bn, down 55.6 per cent from Q1 2011 (US$23.9bn) and the lowest level since Q1 2009 (US$ 8.4bn). The region’s outbound cross-border total deal value was US$ 10.7bn in the first quarter of this year, a 47.4 per cent decrease on Q1 2011 (US$ 20.3bn) and the lowest total since Q3 2009 (US$ 7bn).

While the usual suspects continue to account for the biggest share of Asia-Pacific M&A, there was noticeably more activity in smaller Southeast Asian countries. Perenco SA’s US$ 1.3bn acquisition of the Vietnam business unit of ConocoPhillips placed 11th among the region’s top deals.

In Australia, Rothschils was the number one financial adviser by value, with four deals worth US$5bn. Goldman Sachs came in second, with 3 deals worth US$2.3bn. Macquarie Group had 2 deals worth US$1.4bn.

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