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Clifford Chance

Clifford Chance

APAC Private M&A Market Practice

A unique analysis of Asia Pacific trends in transaction terms during 2021

Our APAC Market Practice Survey comprised an analysis of 65 private M&A transactions we advised on in 2021. All transactions were led out of our APAC offices and were mostly in respect of APAC target companies, but also involved a range of cross-border targets, across a variety of sectors. The sample comprised transactions with private equity sellers, other financial sponsor sellers and corporate sellers.

Our analysis of the results from this year's survey is that, despite some lingering challenges posed by the Covid-19 pandemic, the APAC M&A market remained strong, and largely seller friendly. Terms agreed in APAC private M&A transactions continue to be influenced by European and US M&A practices, with the APAC trend sitting between these two market practices in a few areas. However there remain some key features that are typical to this region, especially in the use of fixed price mechanisms.

This year's results in particular show locked box mechanisms gaining popularity, particularly with private equity and other financial sponsor sellers.

Asia Pacific themes

Other key themes discussed in the report include:

Natsuko Sugihara comments on the APAC market

"APAC private M&A remained strong in 2021, and with buyers seeking the most attractive target companies, the terms also remained largely seller-friendly, although market practice in APAC continues to see buyer-friendly terms, such as conditionality provisions. In particular, we saw this year an increase in the use of locked box mechanisms, by private equity or other financial sponsor sellers. APAC private M&A market practice, whilst influenced by US or European market practices, has its own features according to our surveys conducted over the last few years."