Transaction Trail Annual Issue 2016

  • Singapore experienced the second highest M&A value after the historic highs of 2015
  • Significant growth in PE/VC investments and recovery in the IPO markets from 2015 for Singapore
  • Rampant growth of M&A transaction value in Indonesia at US$ 8.5 billion compared with US$1.6 billion in 2015.

In 2016, the region recorded total deal activity valued at US$111.8 billion spread across 1,308 deals. Globally, more than 35,000 deals valued at over US$3 trillion were registered in the same period. Key findings from the report are summarized below.

Singapore remains at the helm of deal-making in the region
Singapore recorded a total of 800 deals (M&A, PE/VC and IPOs) worth US$88 billion for 2016, which compares with 685 deals (M&A, PE/VC and IPOs) worth US$103.8 billion for 2015. M&A comprised the bulk of the deal volume in Singapore registering 684 deals valued at US$82.7 billion in 2016 compared to US$101.2 billion in 2015.

Transaction Trail H1 2016

The continued momentum in deal volume was mainly attributable to sizeable M&A transactions by the Sovereign Wealth Funds (“SWF”), GIC and Temasek Holdings in consortium as well as stand-alone investments, complemented by other notable deals such as CMA CGM’s acquisition of Neptune Orient Lines, Singapore Telecom’s stake acquisition in Intouch Holdings and Qatar Investment Authority’s acquisition of Asia Square Tower 1.

Outbound deals continue to drive Singapore’s M&A deal value
While Singapore M&A deal volumes grew 16% in 2016, deal values declined by 18% compared to the same period a year ago. In 2016, there were 485 cross-border M&A deals in Singapore registering US$69.7 billion, with the bulk of total deal values coming from 318 outbound deals (Singapore-based companies or SWFs acquiring overseas companies) worth US$57 billion contributing to over 81.9% of the total deal value in 2016 for total cross border deals. Domestic deals contributed to 15.8% of total M&A deal value with 199 deals valued at US$13.0 billion.

The largest contributor to M&A deal values in Singapore was the Real Estate sector at close to 30%. This sector has overtaken last year’s leader, the Technology sector, which has moved to third place in 2016. Industrials contributed approximately 19% to the deal values. Based on M&A deal values, the top 3 sectors (Real Estate, Industrials and Technology) accounted for 65% of total deal values.

Highest transacted value of PE/VC deals in Singapore in 2016, since 2012
PE/VC investments in Singapore companies for 2016 have grown steadily to US$3.5 billion compared to US$2.2 billion, US$2.4 billion and US$0.9 billion for 2015, 2014 and 2013 respectively. Some of the notable PE/VC investments in 2016 were SoftBank Group’s investment in GrabTaxi valued at US$750.0 million, BOC Aviation Pte Ltd by China Investment Corporation and other investors valued at US$572.0 million; GIC, Bain Capital and Advent International’s US$350.0 million investment into Quest Global Engineering Pvt Ltd; and Baring Private Equity’s US$320.1 million privatization of Interplex Holdings Ltd. Most of the notable deals were minority stake investments unlike the last few years, which saw more buyouts.

 Highest transacted value of PE/VC deals in Singapore in 2016, since 2012

Significant pick-up in the Singapore IPO market
The Singapore IPO market has seen improvement in activity in 2016 compared to 2015, with a total of 16 IPOs constituting US$1.9 billion raised on the Singapore Exchange, compared with 13 IPOs in 2015 raising US$450.7 million. However, this is lower than the capital raised in the previous years. The largest contributor to Singapore Exchange listings was Frasers Logistics & Industrial Trust which raised approximately US$664 million.

Bounce back in deal activity in Malaysia and Indonesia
Malaysia and Indonesia recorded 413 and 178 deals (M&A, PE/VC and IPOs) worth US$15.6 billion and US$10.8 billion respectively for 2016. This compares to 360 and 143 deals worth US$9.7 billion and US$2.8 billion for Malaysia and Indonesia respectively for 2015.

Will the “new normal” dampen the robust pipeline?
Looking ahead, there are over 50 deals in the pipeline in the region with potential deal value of over US$16 billion, based on information disclosed. These pipeline and possible deals include the proposed acquisition of InterOil Corp by Exxon Mobil Corp (potential deal value of US$2.5 billion), the proposed acquisition of Super Group Ltd by Jacobs Douwe Egberts B.V. (potential deal value of US$1.0 billion), as well as the proposed acquisition of ARA Asset Management (potential deal value of US$688 million).

Media Coverage:

Broadcast Media

  • Channel NewsAsia, 13 December 2016, “Singapore Tonight: SG M&As: Volumes up, value down” 
  • 938 Live, 13 December 2016, “Business News”

Print and Online Media

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