17 August 2016

Early-stage M&As slowing down in SEA, Korea

Early-stage mergers & acquisitions (M&A) announcements are expected to be flat in Q416 compared to the same period last year due to reduced levels of early-stage M&A activity in Southeast Asia and South Korea, according to the latest Intralinks Deal Flow Predictor (DFP) report* released by Intralinks Holdings. Intralinks is a global provider of software and services, including virtual data rooms (VDRs), for managing M&A transactions.

Specifically, Southeast Asia which includes Singapore, Malaysia and Indonesia, is demonstrating a 47.8% decrease, while North Asia which includes mainland China, Hong Kong and South Korea, is showing an 8.3% decline in early-stage M&A activity. While the Asia-Pacific (APAC) region is reflecting flat growth, Europe, the Middle East and Africa (EMEA) is in positive territory at 15.7%.

The Intralinks Deal Flow Predictor shows the following growth in early-stage M&A activity in APAC compared to the same period last year:

· Southeast Asia (which includes Indonesia, Malaysia and Singapore), is down 47.8%;
· North Asia (which includes mainland China, Hong Kong and South Korea) is down 8.3% due to declining levels of early-stage M&A activity in South Korea;

· India is up 64.7%;

· Japan is up 5.9%, and

· Australia is up 6.9%, its first quarter of growth after four consecutive quarters of flat or declining activity.

Looking at early-stage M&A activity by sector across APAC, the materials (which includes metals and mining) and industrials sectors are the only ones showing positive growth in early-stage M&A activity. The telecommunications, media & technology sector has a 46.2% compared to the same period last year.

According to a “post-Brexit” survey of over 1,000 global deal-makers conducted by Intralinks between July 4 and 8 2016, over 61% of APAC dealmakers feel Britain’s decision to leave the European Union (EU) will have a positive or no economic impact on the APAC region. In the four weeks since the UK’s EU Referendum on June 23 2016, early-stage M&A activity in APAC, as measured by the Intralinks Deal Flow Predictor, has increased by 1.4% compared to the same period last year, showing little or no immediate impact on the APAC region’s M&A activity.

“Southeast Asia is seeing its first decline in early-stage M&A activity after nine quarters of mostly double-digit growth,” said Philip Whitchelo, VP of strategy & product marketing at Intralinks. “The impact of China’s gradual economic slowdown may be starting to impact the previously resilient ASEAN region, as South Korea and China are also showing declines.”


Download the Intralinks Deal Flow Predictor report
*The Intralinks Deal Flow Predictor forecasts the volume of future M&A deal announcements by tracking early-stage M&A activity - M&A transactions across the world that are in the preparation stage or have reached the due diligence stage. These early-stage deals are, on average, six months away from their public announcement. The Intralinks Deal Flow Predictor has been independently verified as an accurate predictor of future changes in the global number of announced M&A transactions.