Clifford Chance

Asian investors see M&A opportunities in Europe / US amongst global economic uncertainty

89% of respondents to Clifford Chance's Asian M&A survey expect outbound M&A from the region to remain at similar levels or increase in the next 18 months

Leading international law firm, Clifford Chance unveils the results of the 2012 survey into trends in Asia Pacific M&A, run in collaboration with FinanceAsia magazine.  Despite the economic challenges around the world, the survey shows a positive outlook in Asia for inbound, outbound and intra-Asia M&A activity.

Some 79% of respondents agree Asia Pacific companies see the US and Eurozone uncertainties as an opportunity for acquisitions there.

Roger Denny, Head of M&A in Asia Pacific commented on the results: "Global market uncertainty – in the US and Eurozone in particular – is certainly impacting deal activity levels. However our survey shows that these uncertainties are also presenting opportunities for M&A for Asian companies looking to buy in these regions. For companies with a global strategy and a healthy balance sheet, it's an exciting time with plenty of opportunities."

This is the sixth year in which Clifford Chance and FinanceAsia have collaborated on a regional M&A survey. Some 239 respondents were surveyed in September 2012, with 67% at CEO, MD, CFO, director or BD/M&A Manager level.

Other survey highlights for 2012 include:

• Global economic conditions (76%) is the biggest drag on M&A but concerns about protectionism and regulatory issues (66%) and unrealistic price expectations (55%) are amongst the top four issues casting a shadow over M&A activity.
• Prospects within the Asia Pacific region remain strong, with 91% expecting intra-Asia M&A to increase or remain at a similar level as last year and China remaining the most popular single market with 59%.  There is also a strong focus on South East Asia – Indonesia, for instance, was identified by 52% (up from 32% last year).
• Traditional control acquisition remains the first choice deal structure but joint ventures were, overall, the most popular structure for the respondents taking into account 2nd preferences.
• The race to secure supplies of natural resources, Asian companies adopting global strategies and depressed valuations in target markets (63%, 57% and 46% respectively) are considered the main drivers for outbound M&A activity.
• Resources still dominate as the hot M&A sector with Oil & Gas (52%), Mining (44%) and Consumer Goods & Retail (36%). Mining interest though has cooled down from last year with a drop of  23% over the previous year.
• Respondents consider it to be a buyer’s market with the acquirer considered in control by 77% of the respondents. For top quality assets though, this is likely to be more  balanced or even in favour of sellers.
• A good acquisition team with local knowledge is the most important factor for successful Asian M&A as cited by 23% of respondents.

Denny continues: "The desire to secure supplies of natural resources remains the top driver for M&A activity, as it was in the prior three years and will certainly emerge as a key trend of this decade."

ENDS

Notes to Editors:

1.     39% of survey respondents were based in Hong Kong, 14% in Singapore, 9% in Australia or New Zealand and 5% in India. Malaysia, Mainland China, Japan, Thailand, South Korea, North America, Indonesia, Taiwan, the UK, Europe, Middle East and other parts of Southern Asia were also represented.