Malaysia chalks up M&A deals worth US$11.7bil

PETALING JAYA: A total of 233 merger and acquisition (M&A) transactions took place up to June 2017 with a total announced deal value of US$11.7bil, where inbound deals accounted for about 70% of the total deal value, according to Duff & Phelps, a global valuation and corporate finance adviser.

“The energy sector saw a large increase in activity with several high value deals for both inbound and outbound.

“The largest energy deal was the acquisition of Refinery and Petrochemical Integrated Development by Saudi Arabia’s Aramco, paying out US$7bil for a 50% stake in the Refinery and Petrochemical Integrated Development (Rapid) project,” Duff & Phelps said in its M&A publication, Transaction Trail, for the first half of 2017.

The report takes an in-depth look at transaction and capital markets activities, including (M&A), private equity (PE), venture capital (VC) and initial public offerings (IPOs), in Singapore, Malaysia and Indonesia over the course first half of 2017.

In the first half of 2017, Singapore, Malaysia and Indonesia recorded total deal activity valued at US$63.3bil spread across 818 deals. Globally, about 19,900 deals valued at over US$1.5 trillion were registered in the same period.

“Malaysia has seen a strong momentum in deal activity with total deals in M&A, PE/VC and IPO valued at US$13.6bil in the first half of 2017 compared to US$9.4bil in first half of 2016,” Duff & Phelps Singapore Pte Ltd managing director Srividya C Gopalakrishnan said.

“When we look at the outlook for the second half of the year, on one hand, the market sentiments are negative which is leading to uncertainty in deal making.

“This is attributable to slower pick up in oil prices; a steady stream of bad news coming from the shipping and marine sector; a lack of large acquisitions in the private sector; a reduced number of IPOs; slowing growth in developing economies; and rapid and unprecedented changes in global regulations among other factors.”

Having said that, Srividya said the silver lining was emerging stronger in the region with several positive developments.

“These include growth in M&A deal volumes and value, a significant increase in PE/VC investment, a strong IPO pipeline for the second half, improved infrastructure in developing countries due to non-traditional sources of energy, more alternate investment funds setting up a base in Singapore, significant development in the tech start-up ecosystem in South-East Asia including an increase in tech Unicorns in the region, several global companies setting up their intellectual property hubs in Singapore and many more such developments,” she said.