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South East Asia M&A

Latest Update: 20 January 2021

South East Asia (SEA) M&A activity declined in 2020 due to the lingering impact of the COVID-19 pandemic. Signs of recovery emerged in 4Q20, which recorded USD 14bn across 88 deals – equal to a 76.28% increase in value and a 17% increase in deal count as compared to 2Q20 (USD 7.94bn, 75 deals). While governments prepare to roll out mass vaccination programs, border closures are expected to continue in the first quarter of 2021 affecting dealmaking in the region.

Key Data Points: 

  • SEA reported USD 51.5bn across 329 deals, a fall of 24.4% in value and 19.2% in count compared to 2019 (USD 68.1bn, 407 deals). It represents 6.2% of total APAC M&A value for 2020 (USD 835.5bn across 4149 deals), down by 4.4 percentage points from a year before.
  • Intra-regional M&A activity generated USD 37.1bn across 185 deals in 2020 – equal to a 10.7% decrease in value compared to a year before (USD 41.5bn, 215 deals).
  • Inbound dealmaking plunged by 45.8% in deal value and 25% in deal count in 2020 (USD 14.4bn, 144 deals) compared to 2019 (USD 26.5bn, 192 deals). Singapore remained the largest destination in the region for inbound deals with USD 8.2bn across 66 deals despite a 20% year-on-year fall in deal value and number of transactions. Indonesia trailed behind with USD 2.4bn across 16 deals despite a 64% plunge in value compared to 2019 (USD 6.6bn, 17 deals).
  • Outbound deals showed a positive graph, value wise, with USD 21.9bn across 103 deals reflecting a 31.4% increase but also a decline of 23.7% count wise as against 2019 (USD 16.7bn across 135 deals).
  • Consumer generated the highest sector value in the region, recording USD 14.75bn in 34 deals – equal to a year-on-year surge of 5.05x in deal value. It was followed by Real Estate, which generated USD 11.2bn across 19 deals, a 30.45% drop in value compared to 2019 (16.15bn; 27 deals). The top sectors in 2019 were Financial Services (17.25bn; 40 deals), followed by Real Estate.
  • Technology was the sector that attracted the highest level of inbound investment in 2020, recording USD 2.8bn in 22 deals – equal to a 50% decline in value compared to 2019 (USD 5.5bn, 31 deals). Consumer sector trailed closely with USD 2.4bn in 17 deals, surging by 3.58x in value year-on-year.
  • Private equity buyout activity in SEA in 2020 (USD 6.22bn, 45 deals) declined by 4.6% in value compared to 2019 (USD 6.52bn, 51 deals).
  • Private equity exits declined by 78.5% in value and 25% in number of transactions in 2020 (USD 2.87bn, 18 deals) compared to last year (USD 13.32bn, 24 deals).

Key Themes:

  • The COVID-19 pandemic left a lingering impact on SEA M&A market in 2020 but dealmaking activity showed signs of recovery toward the end of the year. M&A activity in the first quarter of 2021 is expected to remain tamed following the discovery of new COVID-19 variants and new border closures even as mass vaccination rollouts start in Indonesia and Singapore. However, sources told Mergermarket that dealmaking might pick up later in the year as delayed transactions might finally be finalized and several new deal opportunities emerge.
  • Singapore emerged as the top dealmaking country in the region largely thanks to the USD 8bn merger between CapitaLand Commercial Trust (CCT) and CapitaLand Mall Trust (CMT) and the USD 2bn sale of Aviva Singapore to a consortium led by Singapore Life. The Lion City is expected to continue to lead M&A activity in the region in 2021 as the rollout of its mass vaccination program could revive tourism and enhance demand for aviation, hospitality, retail, and food services.
  • M&A activity in Malaysia will be dominated by domestic deals due to the impact of travel restrictions on inbound and outbound deals. State owned funds like EPF, PNB and Khazanah are expected to divest some non-core assets.
  • Vietnam’s effective management of the COVID-19 pandemic meant that the country’s M&A activity emerged largely unscathed, and a major gap in valuations between buyers and sellers also reduced over the last six months of the 2020, as per advisors. Deal advisors told Mergermarket that domestic dealmaking activity is gaining momentum, while inbound activity is also expected to increase thanks to the surging interest in the country from Japanese, South Korean and Chinese investors hunting for growth opportunities. Several outbound deals are expected to take place in 2021 after the country signed key foreign trade agreements such as the EU-Vietnam bilateral deal and the China-led Regional Comprehensive Economic Partnership (RCEP).
  • Foreign supermarket operators meanwhile continue to retreat from Southeast Asia as they face increasing competition from e-commerce companies, struggle to adapt to local tastes and find it difficult to differentiate themselves without local partners. Thailand’s conglomerate CP Group acquisition of Tesco’s businesses in Thailand and Malaysia for USD 10.6bn announced in March was the largest deal in the region. Another noticeable deals in the Consumer sector include Kimberly-Clark Corporation [NYSE: KMB]’s acquisition of Softex Indonesia for USD 1.2bn. Consumer and Manufacturing sectors are expected to remain attractive in 2021 as consumers’ appetite in the region continue to grow both online and offline.
  • Private equity activity slowed down in 2020 as large sovereign funds and private equity players like GIC and Temasek became more conservative in deploying capital – a trend that might continue well into the first quarter of 2021. However, prospects appear to be brighter in the rest of the year as private equity funds might look for investments more actively due to high levels of dry powder available.

Top Deals

Announcement     date
Target company
Target dominant     sector
Bidder company
Seller company
Deal value     (US$m)
Tesco Stores (Thailand) Limited (86% stake); Tesco Stores (Malaysia) Sdn. Bhd.
Consumer: Retail
Charoen Pokphand Foods Public Company Limited; CP ALL Plc; Charoen Pokphand Holding Co., Ltd.
Tesco Plc; Sime Darby Berhad
CapitaLand Commercial Trust
Real Estate
CapitaLand Integrated Commercial Trust

FGV Holdings Bhd (78.76% stake)
Federal Land Development Authority

Aviva Ltd (75% Stake)
Financial Services
Consortium of investors led by Singapore Life Pte. Ltd.
Aviva Plc
Manila Water Company, Inc. (72% Stake)
Utilities (other)
Prime Metro Power Holdings Corp.


by Nalina Kandasamy

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