KUALA LUMPUR: Malaysia has seen a major reduction in corporate deal activity this year with total deals in mergers and acquisitions (M&A), private equity/venture capital (PE/VC) and initial public offerings (IPO) valued at US$12.5 billion compared with the record levels last year with deals worth US$20.3 billion.
Duff & Phelps said this could be due to political changes and businesses taking a wait-and-see approach on strategic growth initiatives.
“However, momentum has picked up towards the end of the year with a few notable transactions in Malaysia’s healthcare sector, such as Mitsui & Co’s acquisition of a 16 per cent stake in IHH Healthcare Bhd
for US$2 billion,” the global valuation and advisory firm said in a statement today in conjunction with the release of key findings from its Transaction Trail Annual Report 2018.
Duff & Phelps Singapore Pte Ltd Managing Director Srividya C. Gopalakrishnan said Malaysia, Singapore and Indonesia (the region) saw record levels of activity valued at over US$136 billion spread across 1,419 deals, with over 15 transactions valued at more than US$1 billion each.
“While the M&A market has maintained momentum in 2018, the growth was driven by an increase in high value outbound sovereign wealth fund (SWF) deals from Singapore, supported by domestic M&A activity in the region,” she said.
Of the region’s value, Singapore contributed US$106.2 billion through 857 deals, up from US$101.9 billion (842 deals) for 2017.
She noted that the deal landscape was fairly active in Indonesia this year.
“The M&A, PE/VC and IPO values for 2018 for Indonesia have more than doubled to US$19.5 billion compared with US$9.6 billion last year,” she said.
Globally, 39,651 deals valued at US$3.5 trillion were registered in the same period, based on Bloomberg data.
Duff & Phelps said global M&A deal activity edged higher in 2018 in terms of deal value but witnessed a drop in the number of M&A transactions compared with 2017.
About 41 per cent of global deal volume and 50 per cent of deal value occurred in North America for 2018.
Asia-Pacific, which accounted for 23 per cent of global M&A values in 2018, remained a key contributor ahead of Europe (22 per cent) although it was lower compared with 2017 when it had a 29 per cent share of deal value, it added.