Rich with investment opportunities and positive demographics, ASEAN continues to attract international acquirers according to the latest edition of Spotlight Asia, Kroll’s quarterly M&A newsletter, produced in association with Mergermarket.
With 30 deals worth $4.5 billion, Vietnam was the third hottest target jurisdiction by value from 2014 to the first quarter of 2017.
The country continues to seek emerging market status, which would put it on the map of major international asset managers.
While companies listed on its stock exchange continue to face restrictions in gaining additional foreign ownership, the government is reportedly planning for foreign involvement in the country’s infrastructure projects, which are expected to require $400 billion in funding over the next ten years.
The country is also leading the pack as frontier CLMV (Cambodia, Laos, Myanmar and Vietnam) sees fresh, albeit uncertain, interest as they strive to open their doors to cross-border trade.
In 2016, the ASEAN region recorded 534 M&A transactions valued at $57.9 billion, while the first quarter of 2017 sustained momentum with 118 deals worth $14.7 billion.
This was a year-on-year increase of 8 per cent in value and 7 per cent in volume over the same period in 2016.
For foreign inbound M&A, ASEAN saw 223 deals worth $23.7 billion in 2016, a 10 per cent rise in volume but a 16 per cent fall in value from $28.1 billion in 202 deals in 2015.
In 2017, volumes have remained relatively steady while values have shot up, with the first quarter registering as much as 45 per cent of 2016’s annual total.
However, a greater harbinger of M&A trends may come from cross-border activity among ASEAN’s core members. In 2016, intra-regional M&A witnessed a surge in value along with a recovery from 2015’s dip in volume, as ASEAN corporates began expanding into neighboring geographies as they searched out new markets for growth.
Whether 2017 will put on a similar performance remains to be seen, with the year beginning on a slower note with 18 deals worth $1.5 billion in the first quarter amid macroeconomic and geopolitical uncertainty.
Nonetheless, the remainder of the year holds promise for a repeat of 2016’s trend, as ASEAN governments strive to strengthen trade and diplomatic relations and regional corporates take to cross-border M&A as an accelerated pathway to resilient, sustainable, and innovative growth.
Photo: CBR Investment AG