Asia Pacific M&A Exceeds 2013 Annual Volume

Asia Pacific M&A Exceeds 2013 Annual Volume

The value of announced M&A deals involving Asia Pacific companies, excluding Japan, totaled US$552.6 billion so far this year and surpassed the annual volume in 2013 (US$542.9 billion).

Overall Asia Pacific M&A grew 53.3% in deal value compared to the first nine months of 2013 (US$360.5 billion) and witnessed the strongest period for the region since records began in 1980. This was driven by CITIC Pacific’s acquisition of the main assets of its state-owned parent, CITIC Group, for US$42.2 billion.

The average M&A deal value for disclosed deals grew to US$99.0 million compared to US$72.4 million in the first nine months of 2013, as deal-making so far this year involving Asia Pacific companies witnessed at least 9 transactions worth US$5-billion and above (including CITIC Pacific’s US$42-billion mega deal) compared to only three during the same period last year.

Completed M&A activity involving Asia Pacific amounted to $347.6 billion thus far, a 27.1% increase from the first nine months of 2013 (US$273.4 billion) despite an11.4% decline in number of completed deals.

Target Asia M&A Breaks Annual Record; China Remains Most Targeted Nation

M&A transactions targeting Asia Pacific broke annual volume record with US$480.6 billion worth of transactions, up 65.8% compared to the first nine months of 2013 (US$289.3 billion). Chinese companies continued to be the preferred target by both domestic and foreign acquirors with US$251.8 billion, an 81.1% increase over the comparable period last year, and captured 52.4% of Asia Pacific-target M&A activity. United States is currently the most active non-Asian acquiror of Asian companies in terms of deal value with US$19.8 billion worth of transactions from 303 announced deals.

Financials Industry Takes the Lead with 18.6% Market Share
The Financials sector made up the largest portion of the acquisitions involving Asia Pacific companies with US$102.9 billion in deal value, a 154.3% increase from the first nine months of 2013 and captured 18.6% of the M&A activity. This is the strongest first nine months period for the sector involving Asia Pacific bolstered by CITIC Pacific’s US$42.2-billion acquisition of CITIC Group’s main assets.

Sinopec’s US$17.5 billion stake sale in its retail unit to investors pushed M&A deals targeting Energy & Power sector (14.2% market share) to reach US$78.4 billion, a 39.2% increase over a year ago, and witnessed the highest period since 2011 (US$84.5 billion).

Real Estate captured 13.8% of the market activity with US$76.1 billion, up 42.9% from the comparative period in 2013, and witnessed the strongest-ever first nine months period. This was driven by Greenland Holdings’ plans to list on the Shanghai Stock Exchange through a reverse merger (valued at US$10.6 billion) with Shanghai Jinfeng Investments.

Buyside Financial Sponsor M&A Reaches Record High

Buyside Financial Sponsor M&A activity in Asia Pacific witnessed a record period as deal value reached US$56.0 billion so far this year, a 247.7% increase from the first nine months of 2013 (US$16.1 billion), and surpassed annual volume in recent years. This was driven by at least eleven deals greater than US$1-billion (compared to only three deals during the same period in 2013) led by Sinopec’s US$17.5 billion retail stake sale to 25 domestic and foreign investors which involved financial sponsors.

Top Deal: CITIC Pacific Buys Parent’s Main Assets for US$42.2 billion

China’s CITIC Pacific agreed to buy the main assets of its state-owned parent, CITIC Group, in a deal valued at US$42.2 billion which surpassed the biggest-ever acquisition involving Asia Pacific –- PCCW’s US$35.5 billion acquisition of Cable & Wireless HKT in 2000.

Goldman Sachs Leads Asia Pacific M&A Financial Advisors

Goldman Sachs moves up to take the top spot (from its 2nd place position during the first nine months of 2013) in the financial advisory ranking involving Asia Pacific announced M&A deals so far this year. Morgan Stanley, which took first place in the same period in 2013, slipped to third place this year.

Completed M&A Advisory Fees Increases 25.4%

According to estimates from Thomson Reuters / Freeman Consulting Co., M&A advisory fees from completed deals in Asia Pacific reached US$1.5 billion so far this year, a 25.4% growth compared to the same period in 2013. Goldman Sachs currently takes the lead in the M&A imputed fees ranking on advisory work for completed M&A deals in Asia Pacific, with US$133.5 million in related fees, and captured 9.1% of the market share.

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