Jurisdiction - China
Reports and Analysis
South East Asia – Trends in Mergers And Acquisitions.

23 July, 2013


Legal News & Analysis – Asia Pacific


Despite the general slowdown in economies in the United States and Europe, South East Asia has remained relatively active in terms of mergers and acquisitions. We comment on those trends, looking across the region at the sectors with greatest deal flow in recent times.


In 2012, the amount of inbound merger activity for South East Asia was numbered at 344 deals worth US$91 billion, half of which can be attributed to merger activity in the consumer sector. Much of this growth is said to be linked to the emerging middle class in these markets and the growing capacity for discretionary consumption.


Singapore, being the traditional gateway to South East Asia, saw a four-fold increase in the value of deals from US$10.2 billion in 2011 to US$45.5 billion in 2012.1 Food and beverage deals featured heavily, notably Heineken N.V.’s acquisition of Asia Pacific Breweries Limited, followed by TCC Assets Limited’s (an entity controlled by Thai billionaire, Charoen Sirivadhanabhakdi) acquisition of food and beverage giant Fraser & Neave, Limited (“F&N“). The latter transaction also sparked a high profile bidding war between TCC Assets Limited and OUE Baytown Pte. Ltd., a special purpose vehicle controlled by Indonesian property conglomerate, Lippo Group. The F&N transaction is one of a number of deal examples of South East Asian inter-regional M&A.


The appetite for mergers and acquisitions in the consumer goods industry is also increasing elsewhere in Asia. In the most recent quarter, Chinese property group Dalian Wanda acquired one of Britain’s largest luxury yacht manufacturers, Sunseeker. Dalian Wanda had agreed to pay approximately US$794.3 million for privately-owned Sunseeker.


Statistics show that Indonesia as well saw burgeoning activity. The total value of the announced deals in Indonesia in 2012 was approximately US$15 billion, (figures obtained from Mergermarket) more than half of which was concentrated in the financial services and consumer goods industries.


Merger activity in South East Asia is not confined to inbound investments into South East Asia. The slowdown in other markets has also seen outbound investment opportunities from South East Asia to the rest of the world. In 2012, the number of outbound investments from South East Asia totalled 105 deals with a deal value of US$32.7 billion. In the first half of 2013, there have been 47 such transactions, suggesting that the outbound acquisition potential for South East Asia will continue.


For further information, please contact:

Michael Walter, Partner, Herbert Smith Freehills


David Dawborn, Partner, Herbert Smith Freehills


Veronica O’Shea, Partner, Herbert Smith Freehills


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