Sunday, May 16, 2010

M&A Landscape Q1 2010: Asian deals up 197% YoY at US$ 139 bn; World at 573.3 bn US$

                Source: Thomson Reuters, April 2010

Sectors driving M&A: Financials, Energy and Power

According to Bloomberg and Thomson Reuters, M&A activity in Asia (or Asian involvement) amounted to US$139 billion, up 197% over US$46.8 billion in the same period in 2009. Globally Asia accounted for 24.2% of the US$ 573 bn worth deals in Q1-2010. First quarter volumes were driven by Prudential's US$35.5 billion acquisition of AIG's AIA division, which was the largest deal thus far in the Asian insurance industry. However according to Reuters, The transaction fell short of the largest deal of all time in the region: PCCW's US$35.6 billion acquisition of Cable & Wireless HKT in 2000.

Financials were the most targeted sector with a 39% market share from US$54.2 billion in deal activity. Energy & Power followed with US$15.1 billion, capturing 10.9% of the market.

Chinese Dragon: China cross-border M&A was worth US$18 billion, a 155% increase from volume recorded in the first quarter of 2009. Outbound activity amounted to US$14.6 billion while inbound activity totaled US$3.4 billion.

Australian M&A increased by 50.4% to US$28.4 billion from US$18.8 billion last year and marked the highest first quarter volume since 2007.
Worldwide M&A: World M&A was up 21%, while number of deals were up 4%  while the value of worldwide M&A totaled US$573.3 bn during Q1-10 (20.5% growth over Q1-09). It seems this is the strongest opening quarter for M&A...
since 2008. By number of deals, M&A activity is up 4% compared to last year with over 9,000 announced deals. However compared to Q4-2009 deals were down 5% from 601 bn US$.

Advisory fees rises 19% - According to estimates from Thomson Reuters/Freeman Consulting, M&A advisory fees from completed transactions totaled US$5.5 billion for the first quarter of 2010, an 18.9% increase from the first quarter of 2009. Deal activity in the Americas accounted for 49% of the worldwide fee pool, while Europe, Middle East and Africa accounted for 32%. Asia Pacific and Japan contributed 14% and 5%,

The Energy and Power sector was most active during the first quarter of 2010, commanding 20% of announced M&A while the Financials and Real Estate sectors accounted for 18% and 12% of M&A activity, respectively. Deals in the Telecommunications, Consumer Staples, Real Estate, High Tech and Retail have all experienced triple-digit percentage gains over the first quarter of 2009.

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