Asia Tigers Are Driving A Wave Of Mergers And Acquisitions In Australia

Photo: Getty/Dan Istitene

Australia is seeing an increase in so-far unannounced mergers and acquisition, a lot of it from Asia, according to local data gathered for the global Intralinks Deal Flow Indicator.

While there has been an overall decline in announced M & A activity, there’s been a rise in unannounced deals in the works.

The first six months of 2013 saw a sharp decline in M&A activity in Australia with only nine deals over $50 million being announced. Clayton Utz’s The Real Deal report described it as “missing in action”.

However, the global Q3 Intralinks Deal Flow Indicator, which tracks deals reaching the due diligence phase prior to public announcement, shows certain countries have an appetite for Australian assets:

  • China interest in deals in Australia is up 12 per cent by deal volume and 175 per cent by value
  • India is up 75 per cent by volume and 83 per cent by value
  • Thailand is down 33 per cent by volume but is up 160 per cent by value
  • Singapore is down 19 per cent by volume but is up 6 per cent by value
  • UK is up 25 per cent by volume and 207 per cent by value

Global confidence is slowly increasing which will have a flow-on effect for Australia, an Intralinks Dealmakers briefing was told today.

Deals being done now in Australia were said to be more complicated, in a bid to mitigate risk, than they were before the Global Financial Crisis.

Panelists agreed the change in government to the Coalition had helped confidence but what was needed was consistency in the regulatory and policy environment.

“I don’t think we’re going to see an influx from there (Asia) just because Tony (prime minister Abbott) says the door is open,” said Tim Miles, founder of corporate advisory firm Miles Advisory.

However, Abbott did get points for making an early visit to Indonesia which sent a message to the rest of the world that Australia was open for business.

Globally there is an 18 per cent increase in year-on-year early stage global M&A activity, with strong performance in Europe, Middle East and Africa.

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