Asian M&A breaks half-year record

Asian M&A has got off to a flyer in the first six months of this year. Goldman and Flemings share the honours.

Asian M&A activity has really taken off in Asia this year, at least according to figures released today by Thomson Financial Securities Data. In the first half of 2000, mergers and acquisitions came to a value of $87 billion û a 117% growth over the same period last year.

However, one big deal skews the numbers somewhat. The Pacific Century CyberWorks (PCCW)/C&W Hong Kong Telecom acquisition at $37.4 billion is easily the biggest M&A deal this year. It dwarfs the second biggest deal û TSMC's $6.45 billion acquisition of Worldwide Semiconductor û and the third-placed deal û Korea Telecom's $2.45 billion purchase of Hansol M.Corp.

Without the PCCW/C&W HKT deal, the value of all the Asian M&A activity so far this year would be just under $50 billion û still almost 20% higher than the $40 billion recorded in the same period last year. Nevertheless, it is telecom and technology deals which have really spurred the market so far this year. This is in marked contrast to last year where most of the deals were borne out of restructuring and had a distinctly old economy feel to them.

The geographic breakdown of where the deals have been happening again shows that it is the tech sectors of North Asia which have been the most active countries in M&A. Hong Kong has seen 53% of the market, South Korea has seen 12% of the market, while Taiwan has taken 9.5% of the Asian M&A market.

Goldman Sachs is the leading adviser so far this year for deals that have actually been completed. The firm has advised the targets or the acquirers on nine deals with a combined value of $11.6 billion. However, if you add up the value of the deals advised on by Flemings and Chase - two firms which have announced their own plans to merge û their total comes to $12,798 billion, eclipsing Goldman's total by over $1 billion.

Asian Target (Excluding Japan) Completed Adviser Ranking
Ranking By Deal Value
1/1/2000 - 30/6/00
Adviser Rank Value ($M)
1 Goldman Sachs 11,661
2 Flemings 9,734
3 Morgan Stanley Dean Witter 4,914
4 Merrill Lynch 4,817
5 Chase Manhattan 3,064
6 ING Barings 2,265
7 JP Morgan 2,242
8 ABN Amro 1,997
9 CSFB 1,992
10 HSBC 1,555
Asian Target (Excluding Japan) Announced Adviser Ranking
Ranking By Deal Value
1/1/2000 - 30/6/00
Adviser Rank Val ($M)
1 Flemings 42,726
2 Merrill Lynch 39,705
3 Salomon Smith Barney 38,734
4 UBS Warburg 37,112
5 CSFB 36,966
6 ING Barings 36,214
7 Greenhill & Co 35,495
8 Bank of China 35,495
9 Goldman Sachs 8,733
10 Morgan Stanley Dean Witter 6,793
Source: TFSD


When it came to deals that have been announced but have not been completed, Flemings does top the table being an adviser to 22 deals worth $42.7 billion.

In all it has been a spectacular year for Asian M&A so far. Bankers working in the M&A market in the region believe that it will continue strong for the rest of the year as consolidation in the tech and telecom sectors continues apace and residual restructuring is finalized. Moreover, inward investment by US and European companies could increase in the second half as growth rates in the West slow down. Even so, in the first half this year it has been mainly domestic, or intra-Asian deals which have dominated, rather than the intercontinental deals.

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