According to GlobalData’s latest report “Mergers and Acquisitions Deals By Top Themes and Industries in Q2 2022 — Thematic Research”, the Asia-Pacific (APAC) region recorded a growth of 119 per cent in M&A deal value in the second quarter of 2022 when compared to the first quarter (Q1), despite the various financial challenges and geopolitical issues currently occurring.
Australia, India and China ranked in the top three countries in terms of M&A deal value in Q2, with India accounting for 50 per cent of the top 20 deals. Following the top three in contributions to M&A deal value were Indonesia, Japan, Malaysia and South Korea.
The report revealed that APAC and Europe were the only regions to record positive growth in deal value during this time, with Europe recording a 60 per cent growth.
Thematic research analyst at GlobalData, Snigdha Parida, said that despite the “major geopolitical and financial headwinds” persisting globally, M&A activity in the APAC region has “proved resilient” in the second quarter of 2022, particularly in India.
“The two biggest deals seen in India in the quarter were the Housing Development Finance’s merger with HDFC Bank for $58.5 billion, and the acquisition of a 25 per cent stake in Adani New Industries by TotalEnergies from Adani Enterprises for $12.5 billion,” Ms Parida said.
The continued COVID-19 lockdowns have resulted in sluggish M&A activity in countries such as China. However, the activity is expected to recover soon, as cities such as Beijing and Shanghai eventually return to normal.
Ms Parida continued by stating that the “progressive lifting” of COVID-19 restrictions along with stable governance has resulted in increased investor confidence in several south-east Asian countries, with companies in the region looking towards “innovative technologies” to maintain a competitive edge during “macroeconomic headwinds” and supply chain disruptions.
“With the progressive lifting of COVID-19 restrictions and stable governance, investor confidence is rising in many south-east Asian countries,” Ms Parida said.
“Companies in the region are looking to innovative technologies to remain competitive amid the supply chain disruptions and macroeconomic headwinds.”
“Despite the current investor optimism in APAC, rising interest rates and high inflation can still create challenges for the upcoming deals,” Ms Parida stated.
“Global uncertainties like the Russia-Ukraine conflict and the market concerns regarding the impending recession will make companies less likely to undertake deals in the second half of 2022.”