S'pore M&A off to a slow start; $10b worth so far

Dealmakers' appetite for mergers and acquisitions (M&As) has faltered, resulting in the slowest start to the year since the first quarter of 2013.

The value of announced M&A deals involving Singapore companies has reached US$7.7 billion (S$10.8 billion) so far this year, a decline of 21 per cent from the same period last year, according to data compiled by Thomson Reuters and released yesterday.

The number of announced deals has also fallen 38.1 per cent from the first quarter last year, but what 2017 has lacked in volume, it has partially made up for in value.

The average M&A deal size for disclosed deals grew to US$88.1 million this year, compared with US$69.3 million in the same period last year.

This year also witnessed more Singapore companies participating in deals above US$500 million compared with the same period last year.


The biggest deal involving a Singapore investor this year was GIC and Paramount Group's joint venture to buy 60 Wall Street for US$1.04 billion (S$1.5 billion). PHOTO: GIC

First quarter cross-border deal activity fell 30.1 per cent from a year ago to US$4.9 billion.

Singapore's inbound M&A activity was down 40 per cent from a year ago, while outbound M&A activity dipped 26.8 per cent from the first quarter last year.

Domestic M&A activity also slowed to US$1.1 billion, a 17.1 per cent decrease in deal value from the first quarter of 2016.

On the domestic scene, real estate was the hottest target industry, with such deals accounting for 31.5 per cent of domestic M&A activity. In second place was healthcare, accounting for 29.4 per cent of market share.

Likewise, the real estate sector accounted for 41.9 per cent of all deals involving Singapore companies in the first quarter, with deals worth US$3.2 billion, the highest-ever first quarter total for the sector since 2015.

The second hottest sector for deals involving Singapore firms was energy and power, with deals worth US$1.1 billion inked in the first quarter, up 523.3 per cent in terms of deal value from a year ago.

Consumer products and services was third place with US$865.5 million by deal value, up 3.5 per cent from the first quarter of 2016.

The biggest deal involving a Singapore investor this year was sovereign wealth fund GIC and Paramount Group's joint venture to acquire 60 Wall Street, an office tower in New York, for US$1.04 billion in January.

A version of this article appeared in the print edition of The Straits Times on March 17, 2017, with the headline 'S'pore M&A off to a slow start; $10b worth so far'. Print Edition | Subscribe