The advisory firm Duff & Phelps claims that amidst a global trend of a global slowdown in 2017 with respect to corporate deal making or mergers and acquisitions as reported by many studies dwelling into the aspect of tracking of mergers and acquisitions, there is one country that has proved other wise and reported such deal in contrast to the global trend.
That country is Malaysia.
Noting the highest level in mergers and acquisitions in the last five years, there were 408 deals made in the country in 2017, and this amounted to a total transaction value of $17.57 billion. this was disclosed in the latest Transaction Trail report prepared by the Duff & Phelps and released on Tuesday. Malaysia had recorded 375 deals in corporate deals that was worth $14.25 billion last year.
Duff & Phelps said that the enhancement in the number of mergers and acquisitions as well as an increase in the volume of the same in the Southeast Asian country was in sharp contrast to what happened in this aspect throughout the rest of the global economies.
Globally, there were 36,718 deals for merger and acquisitions in 2017 that totaled to about $2.82 trillion in value compared to a total value of $3.61 trillion generated form the making of 40,305 corporate deals for mergers and acquisition in the year pervious to it, showed the firm’s data.
“Globally, there’s been a bit of a slowdown in M&A deal activity, PE (private equity) and VC (venture capital) investments as well. We’ve seen a bit of slowdown in China as well but we seem to be seeing an increase in Southeast Asia,” Srividya Gopalakrishnan, managing director at Duff & Phelps, said.
Gopalakrishnan added that Southeast Asia has become the favored destination for companies that are based in China and Hong Kong in terms of business opportunities because these firms are facing severe limitations on capital outflows imposed by the government. And it is this restrictive policy that has led to the increase in merger and acquisition activities in the region and this rising trend is also expected by the advisory firm to continue into the next year as well.
Chinese and Hong Kong companies last year “did a lot of global acquisitions,” she said. “Now they seem to be looking more at Southeast Asia, because the deal sizes aren’t that big but they still give them great impetus for their own growth.”
(Adapted from CNBC)