Asia-Pacific M&A volume falls for third consecutive year, deal size grows

HONG KONG Fri Dec 13, 2013 9:53am IST

A man stands on an escalator in the financial district of Pudong in Shanghai November 20, 2013. REUTERS/Carlos Barria/Files

A man stands on an escalator in the financial district of Pudong in Shanghai November 20, 2013.

Credit: Reuters/Carlos Barria/Files

Related Topics

Stocks

   

HONG KONG (Reuters) - Asia-Pacific M&A volumes fell 3.3 percent this year, recording the smallest annual tally in four years with stock market volatility hitting the confidence of buyers.

On the bright side, according to investment bankers interviewed by Reuters, the 2013 Asia acquisition arena was characterized by larger deals and a 13 percent rise in average fees earned per completed deal, according to Thomson Reuters calculations.

M&A specialists in the region expect takeover activity to improve in 2014 on the hopes that more of Asia's state-owned enterprises will seek to grow outside their home markets.

"We see a continued trend of larger-sized deals," said Rob Sivitilli, Asia head of M&A for J.P. Morgan (JPM.N). "Such deals typically require M&A advice."

Announced Asia-Pacific M&A deals in 2013 totaled $510 billion, according to preliminary data from Thomson Reuters, recording a third consecutive year of decline.

Mergers and acquisitions are a sign of corporate confidence and strengthening financial markets. Asia's share of the global M&A market was about 7 percent in 2000, a figure that rose to 20 percent in 2010 and which has now steadied to between 16-17 percent in the past two years.

GRAPHIC: Asia M&A volume link.reuters.com/gym45v

Morgan Stanley (MS.N) topped the 2013 league table rankings for the region, followed by UBS (UBSN.VX), Goldman Sachs (GS.N) and J.P. Morgan.

League table standings serve as key marketing material for banks, although more important is a bank's ability to bring revenues to the franchise through deal advisory.

M&A advisory fees in Asia, while a fraction of the total that the United States generates, have been steadily growing, even with deal volumes slowing, thanks to larger transactions.

Clients are beginning to pay for advice and J.P. Morgan's Sivitilli said the average fee per deal earned by the bank jumped 40 percent this year.

Morgan Stanley pocketed $108.3 million from completed deals, according to Thomson Reuters/Freeman Consulting Co, which calculates and estimates fees. For Morgan Stanley, that was a 6.3 percent rise from last year.

Goldman Sachs was No.2 with $87.1 million fees, followed by Citigroup (C.N) with $80.5 million, the estimated data show. JPMorgan came in at No.5 with $74.5 million.

Bankers expect more M&A deals with Asian buyers and Asian targets in 2014 as valuations in the region remain cheap compared to other parts of the world.

"There continues to be strong cross-border interest in Southeast Asia assets, especially from financial institutions and consumer companies abroad, including Japanese corporates," said Hsin Yue Yong, Goldman Sachs' head of investment banking for Southeast Asia. (Additional reporting by Saeed Azhar in SINGAPORE; Editing by Michael Flaherty and Matt Driskill)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Iron Ore Mining

REUTERS SHOWCASE

Tracking Markets

Tracking Markets

Sensex, Nifty surge to record high; Sesa gains  Full Article 

Rupee Falls

Rupee Falls

Rupee sees worst single-day fall in over a month  Full Article 

TCS-Mitsubishi

TCS-Mitsubishi

TCS, Mitsubishi to form software services company  Full Article 

Deal Talk

Deal Talk

Hero Motor to invest $40 million in Bangladesh joint-venture   Full Article 

Telecom Sector

Telecom Sector

RIL telecoms unit in tower lease pact with ATC  Full Article 

Japanese Economy

Japanese Economy

Japan exports growth slows sharply, keeps pressure on BOJ to act  Full Article 

A Tough Sell

A Tough Sell

Insurance against a China financial crisis  Full Article 

Tyre Debris

Tyre Debris

Bangalore-bound Malaysia Airlines plane turns back after tyre burst on takeoff  Full Article 

Digital Currency

Digital Currency

At Mt. Gox bitcoin hub, 'geek' CEO sought both control and escape  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage