Chinese outbound M&A fuels 82% jump in Asia Pacific H1 deal value

Skadden tops Mergermarket's league tables by value, with India's AZB & Partners leading the pack for volume
hina stock market / Shanghai stock exchange analysis forex indicator trading graph chart business growth finance money crisis economy and Trade war with China flag

Poring Studio; Shutterstock

M&A activity in the Asia Pacific surged in the first half of the year to match the global M&A market rebound, fuelled by an onslaught of high-value deals in the technology sector.  

The spike in activity translated into a volatile Mergermarket deal table for the region when measured by value with a slew of US firms securing top slots, including Skadden Arps Slate Meagher & Flom, which jumped from ninth to first against the same period last year, Sullivan & Cromwell, which climbed to second from 66th, and Ropes & Gray, up to third place from 67th (see table below).

Deal making in APAC, excluding Japan, generated $593.8bn across 5,800 deals in the opening six months of 2021, representing an 82% increase in year-on-year deal value despite a moderate 1.2% increase in the number of transactions, according to Dealogic’s M&A Insights team.  

Data showed that the activity boom was in large part due to the surging valuation of deals in the region’s tech sector, with year-on-year value more than doubling to $154.4bn across 1,242 deals, the highest valuation for tech deals on record since 2017.  

Chinese outbound M&A jumped in 2Q21 as a result of regulatory crackdowns on its internet platform’s ‘monopolistic and unfair competition behaviour’, Dealogic’s Insights team said, fuelling Chinese tech giants’ appetite for overseas expansion.  

Bryan Koo, a partner at Clifford Chance in Hong Kong, said some of the key drivers of APAC deals include strong appetites among private equity fund and financial investors, low interest rates and the accessibility of the acquisition debt financing market, and the bustling IPO market in Hong Kong.  

“Together, these factors push up deal volume in Asia, as well as the valuation of target companies. In a number of auction sales announced recently in APAC, the target valuation is high compared to historical averages,” he said.  

Koo added: “We expect M&A volume in APAC to remain high – for as long as the above macro factors remain broadly unchanged. The sectors which are popular include tech, biotech, pharmaceutical and healthcare, consumer and retail services and real estate. For China, we see strong deal volume in growth and venture capital fundraisings, and we expect buy-out and take-private transactions to remain active.” 

Wall Street’s Skadden Arps Slate Meagher & Flom topped the league tables in terms of deal value, working on 11 deals worth $49.8bn, allowing it to grace the top spot after placing ninth in 1H20. It was the only firm making a return to the top ten, with Sullivan & Cromwell and Ropes & Gray occupying the second and third spots on the list, catapulting up from 66th and 67th place, respectively in 1H20.  

Sullivan & Cromwell achieved a staggering 2,389% value change from the same period last year, working on 11 transactions worth $47.6bn. Ropes & Gray’s similar meteoric rise up the charts saw it generate $43bn across eight deals in the first half of the year.  

The top five was rounded out by Hughes Hubbard & Reed, which jumped 98 places to take the fourth slot, working on three high-value deals worth $40.2bn. Cooley, meanwhile, sat in fifth place, working on nine transactions worth $36.2bn. 

India’s AZB & Partners overtook Cyril Amarchand Mangaldas in terms of deal count, working on 59 deals worth $19.34bn, ten more than 1H20 when it came in second place behind its local peer, which fell to eighth place. South Korea’s Kim & Chang and Hong Kong’s King & Wood Mallesons followed close behind AZB & Partners, working on 51 and 46 transactions, respectively.  

In Japan, M&A activity generated $50.1bn across 1,626 deals, representing an 18% increase in deal value and an 11% increase in deal volume as the Japanese M&A market gradually begins to recover from the pandemic’s heavy impact.  

Nagashima Ohno & Tsunematsu topped the Japanese table by deal value, advising on $20.2bn worth of transactions, more than double the value of its deals in the same period last year. Anderson Mori & Tomotsune took the top spot in terms of deal count, working on 40 transactions, 21 more than last year. 

Meanwhile, a US M&A surge accounted for more than half of the global total in 1H21, according to Mergermarket


Mergermarket: Asia Pacific (excluding Japan) H1 2021 by Value

20212020FirmValue ($bn)Deals
19Skadden Arps Slate Meagher & Flom49.811
266Sullivan & Cromwell47.611
367Ropes & Gray438
4102Hughes Hubbard & Reed40.23
6=-Travers Thorp Alberga34.71
87Fangda Partners3042
96Cyril Amarchand Mangaldas26.337
1011Freshfields Bruckhaus Deringer25.320

Mergermarket: Asia Pacific (excluding Japan) H1 2021 by Volume

20212020FirmValue ($bn)Deals
12AZB & Partners19.459
25Kim & Chang24.451
34King & Wood Mallesons22.646
425Lee & Ko11.546
58Khaitan & Co1444
67Herbert Smith Freehills16.343
76Fangda Partners3042
81Cyril Amarchand Mangaldas26.337
93Shardul Amarchand Mangaldas & Co15.537

Email your news and story ideas to: [email protected]