PE investments in Asia-Pacific region touch $11.9 bn in 2015: Report

Australia led the region by a considerable margin, with $10.2 bn spread across five buyouts

Asia-Pacific remained one of the world's busiest markets for energy M&As, witnessing 200 deals, while private equity (PE) investment in the region totaled $11.9 billion last year, says a report.

According to the joint report by international law firm Eversheds and M&A intelligence service provider Mergermarket, PE investment in the Asia-Pacific energy space totaled $11.9 billion in 2015, with 17 buyouts - the best performance since 2007.

Australia led the region by a considerable margin, with $10.2 billion spread across five buyouts. This was followed by India, with $920 million (four buyouts), and China, with $379 million (three buyouts).

While PE interest in oil and gas assets is picking up slightly, opportunities in clean energy assets and infrastructure are attracting greater attention, the report added.
 
Ahead of the 2015 COP21 climate talks in Paris last December, India's energy minister Piyush Goyal announced plans for a $1 billion PE fund for the renewable energy sector.

"A number of Indian clean energy companies were also the subject of PE buyouts throughout the year, including a $600 million acquisition of Mumbai-based Continuum Wind Energy," the report added.

It said energy corporates were rationalising their operations in the Asia Pacific region driven by ongoing uncertainty toward global market conditions.

"With markets unsure how long depressed prices will continue, producers are seeking to cut costs through restructuring and, in some cases, widespread divestment programmes," said the report, A towering presence: Asia-Pacific energy M&A.

According to Eversheds partner Charles Butcher oil price volatility is one of the greatest impact on Asia-Pacific energy M&A.

According to Mergermarket data, 2015 closed with 200 M&A transactions completed in the Asia-Pacific region, with 85 involving Chinese companies, at a total value exceeding $56 billion, with the country's demand for oil due largely to ongoing urbanisation and rising household incomes.

Australia and New Zealand, with 28 and 5 deals respectively, contributed to 17 per cent of Asia's overall deal count, amounting to a total transaction value of $20.5 billion.

Chinese-led cross-border values topped $10.8 billion through 23 deals, up from $4.1 billion through 22 deals in 2014.