Asian mergers and acquisitions buoyant as local firms target fast expansion and multinationals seek regional foothold
Takeover activity in Asia remained healthy last year as local companies looked for fast ways to expand and multinationals continued to seek a footprint in the region.
'It's about the pursuit of growth,' said Michael Berchtold, president of Asia Pacific investment banking at Morgan Stanley. 'For a lot of Asian companies this means either growing through domestic consolidation or trying to achieve growth through expansion outside their home markets. For multinationals the opportunity for growth is in this region.'
According to Thomson Financial, the number of announced mergers and acquisitions in Asia outside Japan increased by 17.35 per cent to 6,365 last year, while the transaction value rose 3.06 per cent to US$103.9 billion.
The number of completed deals rose by 15.51 per cent to 3.210, but the transaction value fell by 13.95 per cent compared with 2003 to US$71.93 billion.
'The headline number [value of announced transactions] may be only marginally up, but it's been a good year for mergers and acquisitions practitioners because the quality of the pipeline is improving,' said Colin Banfield, head of M&A for non-Japan Asia at Credit Suisse First Boston.
'A few years ago we saw mainly asset injections within the same group, but now it's almost all cross-border in and out of the region where people need to sit down and drive a hard negotiation,' he said, pointing particularly to the increasing number of Chinese companies 'aggressively looking for opportunities offshore'.