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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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