What’s going on here?
Financial advisory fees for mergers and acquisitions in Asia hit an 11-year low in the first half of 2024, totaling just $1.5 billion, according to the London Stock Exchange Group.
What does this mean?
This marks a significant downturn for the Asian M&A landscape, with announced transactions dropping 25% year-on-year to $317.5 billion – the lowest in over a decade. Japan, representing 40% of total M&A fees, saw its announced deals decrease by 23% to $61 billion, influenced by a weakening yen. Meanwhile, China experienced a 25% decline to $108 billion, the lowest since 2012, amidst economic slowdowns and rising geopolitical tensions. One notable setback was Australia’s BHP Group withdrawing from a potential $49 billion mega-deal with Anglo American, which could have set the stage for one of the year’s largest advisory payouts. In contrast, global M&A saw a 16% rise, totaling $1.5 trillion.
Why should I care?
For markets: Glimmers of hope in a tepid market.
Despite the slump, some bankers anticipate a rebound driven by private equity, take-privates, and digital infrastructure investments. They expect an uptick in deal activity towards the year’s end, buoyed by more reasonable valuations and stronger financial markets. Additionally, China’s outbound M&A activities are picking up, with both private and state-owned enterprises eyeing assets in Europe, hinting at potential future deal flow.
The bigger picture: Signs of recovery on the horizon.
While the current numbers paint a grim picture for M&A in Asia, an increase in capital markets activity in the second quarter is fostering early-stage M&A discussions. According to Bank of America’s Head of Asia Pacific M&A, this could signal a more positive outlook for the region’s deal-making landscape as businesses return to the market with adjusted valuations and a broader buyer base.
Source link : https://finimize.com/content/asias-ma-fees-hit-11-year-low-in-2024
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Publish date : 2024-06-27 00:00:51
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