'APAC saw slower pace of deals in 2016; India a bright spot'

The Asia Pacific, excluding Japan region, saw a slower pace of deal making in 2016 as compared to the previous year, but India was a bright spot with M&A activity at the highest annual total record, a report says.

According to global deal tracking firm Mergermarket, the Asia-Pacific (excluding Japan) region saw M&A deals worth USD 658.8 billion, by way of 3,675 transactions, representing a 25.5 per cent decline in value terms over the previous year when 3,812 deals worth USD 883.7 billion were announced.

India has been a bright spot for Asian M&A activity during 2016, with 388 deals worth USD 64.5 billion up 90.5 per cent by value compared to 2015 (421 deals, USD 33.9 billion) to reach its highest annual total on record.
 

According to Mergermarket intelligence, the Indian chemicals industry is expected to see an increased number of deals in 2017 on the back of a relative slowdown in Chinese manufacturing sector and growing appetite of multinationals to expand their presence in the country.

The main areas of interest are speciality chemicals, aroma chemicals, agro chemicals, flavour and fragrances, and niche chemicals, it added.

Regarding the Asia-Pacific M&A activity, the report said that with the Chinese economy continuing to experience turmoil and Western countries undergoing transformative political change, the outlook for Asian M&A remains "uncertain."

China's acquisitive streak abroad has been a headline trend during 2016, with 372 deals worth USD 206.6 billion representing the highest annual outbound deal value on record.

However, in a bid to reduce capital flight, the Chinese government recently took a U-turn in financial policy, pledging to crackdown on costly outbound deals over USD 2 billion.

"This move is likely to result in more modest deals in 2017, although the appetite for investment remains," the report said adding that in turn, this potential reduction of outbound activity may cause a resurgence in China's domestic M&A.