M&A deals involving Singapore firms down 61% to date this year: Thomson Reuters

SINGAPORE - The value of announced mergers & acquisitions involving Singapore companies reached US$21.4 billion (S$28.7 billion) so far this year, a 61.3 per cent fall from a strong first half period in 2014 (US$55.2 billion).

-- PHOTO: THOMSON REUTERS

Deal value fell off sharply in the second quarter of this year - amounting to US$7.8 billion, down 43.0 per cent from the first quarter of 2015 and 68.3 per cent from the second quarter of 2014.

Total cross-border deal activity amounted to US$12.8 billion, a 61.8 per cent decline compared to the first half of 2014 (US$33.4 billion). This was driven by a decline in deal value from outbound M&A activity which dropped 78.1 per cent over a year ago. Inbound M&A activity reached US$6.8 billion, a 9.8 per cent increase compared to the first half of 2014.

Domestic M&A activity also slowed down to US$4.4 billion, a 68.4 per cent decrease in deal value from the first half of 2014.

Energy & power takes the lead with 23.4% market share

The majority of the deal making activity involving Singapore companies targeted the energy and power sector which captured 23.4 per cent of the market share. This was led by Israel Corp Ltd's completed spin off of its Kenon Holdings unit, an investment holding company, for a total value of US$3.2 billion (including net debt), to its shareholders. The deal pushed overall Singapore M&A activity targeting energy & power to US$5.0 billion, a 98.6 per cent increase compared to the first half of 2014.

The real estate sector, which took majority of the market share during the same period last year, followed second with 22.9 per cent market share worth US$4.9 billion, down 72.5 per cent over a year ago.

Private equity-backed M&A down 85%

There was US$186.1 million worth of such deals so far this year, a significant decline from the first half of 2014 (US$1.2 billion), and the lowest first half period in terms of deal value since 2013 (US$83.3 million).

An investor group, comprised of Elang Mahkota Teknologi Tbk PT, Square Peg Capital Pty Ltd, and TGP Capital Partners LLC acquired an undisclosed minority stake in PropertyGuru, a real estate portal operator, for US$129.5 million.

Inbound M&A Increases 10%

-- PHOTO: THOMSON REUTERS

Foreign acquisitions targeting Singapore-based companies reached US$6.8 billion so far this year, a 9.8 per cent increase in deal value compared to the first half of 2014. This is the highest first half period since 2008 when deal value for inbound acquisitions reached US$9.6 billion.

Japan announced the most number of deals targeting Singapore with 16 transactions worth US$1.2 billion, up 7.8 per cent over a year ago. Kintetsu World Express Inc of Japan acquired the entire share capital of APL Logistics Ltd from Neptune Orient Lines for US$1.2 billion.

Outbound M&A down 78% to lowest since 2009

-- PHOTO: THOMSON REUTERS

Singapore companies slowed down their overseas acquisitions this year. Outbound M&A totaled US$6.0 billion so far this year, a 78.1 per cent decline in deal value after witnessing a record period in the first half of 2014 (US$27.2 billion). This is the lowest first half period for the city-state's overseas acquisitions since 2009 when deal value dipped to US$608.7 million.

In terms of deal value, the United Kingdom is the most targeted nation with US$1.1 million, or 17.7 per cent of Singapore's outbound M&A activity. The United States followed second with 13.8 per cent market share worth US$821.6 million, down 17.3 per cent from the first half of last year.

China saw the most number of acquisitions from Singapore with 19 announced deals so far this year worth US$246.4 million.

ann@sph.com.sg