Deal activity in Asia falls to its slowest pace in five years amid US-China trade war, global slowdown, Dealogic says

Mergers and acquisitions in Asia occurred at their slowest pace in five years in the first nine months of 2019 against the backdrop of a global economic slowdown and the ongoing US-China trade war, according to Dealogic.

At the same time, Chinese companies saw a record high for sales of overseas assets at US$40.2 billion in the January-September period and a third consecutive year of declining outbound merger activity, the financial data provider said. Beijing began a campaign to cut debt levels in 2016 that has seen Chinese companies, such as Anbang Insurance Group, Dalian Wanda Group and HNA Group, forced to sell off assets after a buying spree.

“Notably, among all the target nations of Chinese divestments, the US continues to be the largest transaction volume, reaching US$26.3 billion, a little more than four times the volume of the same period in 2018,” Dealogic said.

Globally, merger and acquisition volume declined 5.6 per cent to US$3.05 trillion, compared with US$3.23 trillion in the same period of 2018, according to Dealogic.

The global decline comes as a trade war between the US and China has raged for more than a year and growth is slowing globally. The trade war, which has seen both countries put tariffs on hundreds of billions of dollars of goods, has cut into global trade and weighed on business sentiment, with companies delaying future investment.