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June 17, 2010

PwC predicts increase in M&A activity in Asia

M&A activity in Asia has returned to near
pre-crisis levels, according to PricewaterhouseCoopers (PwC).

The Big Four firm has also predicted increased
competition for deals in the coming year.

A report by PwC in collaboration with IDC
Financial Insights Asia-Pacific titled What Lies on the
Horizon? New Players – New Rules – New Opportunities
found
that M&A deals in Asia-Pacific slowed by 12% from 567
transactions in 2008 to 499 in 2009, with total disclosed deal
value falling by $8.2bn.

But PwC China leader of financial services
M&A Matthew Phillips said a significant increase in deal
activity is predicted in the coming year.

 “Global players that survived the crisis
are faced with limited growth in mature markets in the West and
Japan and are renewing their pursuit of growth opportunities in the
regions growth markets,” Phillips said.

The drop in M&A activity has hit the
profits of professional services firms, in some cases forcing them
to lay off staff, so an upturn will be welcome news.

The PwC report included a survey of 122 senior
M&A decision makers in Asia.

The survey found 56% of those looking to
expand inorganically have ambitions to expand into new geographic
regions.

The countries most likely to witness the
highest number of new market entrants include Mainland China,
India, Malaysia and Indonesia.

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