Singapore sees higher number of M&A deals in 2016 but deal values plummet

The rise in deal volumes in Singapore was mainly driven by the rise in transactions done by state wealth funds GIC and Temasek Holdings

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A woman passes a logo of state investor Temasek Holdings at their office in Singapore July 8, 2014. REUTERS/

Singapore saw the highest number of merger and acquisition deals in 2016 in the region, outpacing Malaysia and Indonesia. However, while M&A deal volume expanded 16 percent compared with the previous year, the value of transactions declined by 18 percent.

The rise in deal volumes in Singapore was mainly driven by the rise in transactions done by state wealth funds GIC and Temasek Holdings. Transactions worth US$88.1 billion (S$125.4 billion) were recorded in Singapore over the last year, global valuation and corporate finance advisor Duff & Phelps said in a report.

The total number of transaction in Singapore stood at 800, far higher than 685 deals last year. The report said Singapore witnessed a jump in outbound deals with as many as 485 cross-border involving US$69.7 billion. "Clearly, Asia has emerged as a strong player in the M&A arena, overtaking Europe, driven by large outbound acquisitions by China, Singapore and other Asian countries in their quest to increase their global footprint," Duff & Phelps managing director Srividya Gopalakrishnan said according to the Straits Times.

Together Singapore, Malaysia and Indonesia saw deal activity valued at US$111.8 billion spread across 1,308 transactions.

Earlier this month, Singapore's sovereign wealth fund GIC said it will invest 3.5 trillion rupiah (S$370 million) in Indonesia in to expand the theatre chain across the country. The latest investment by the Government of Singapore Investment Corporation is part of its partnership with local firm Nusantara Sejahtera Raya that operates 864 screens in 157 cinemas across 36 cities in Indonesia.

In October Singapore's Temasek has said it is investing $347.2 million in the Chinese health care sector. The fund will partner with Columbia to form a 50-50 joint venture that taps into the growing health care sector in China. The JV will focus on providing health care services to China's burgeoning middle-class population.

Singapore Telecommunications (Singtel) said in August it was investing about S$2.47 billion to increase its stakes in Thai telecom company Intouch Holdings and India's Bharti Telecom as part of its strategy to boost exposure to emerging markets. Singtel said it would acquire 21 percent stake in Thailand's Intouch Holdings PCL and 7.39 percent stake in Bharti Telecom (BTL) from Temasek Holdings, the state investor with whom it had entered into conditional shares purchases

In June, Qatar Investment Authority agreed to buy a 43-storey office building in Singapore from BlackRock for S$3.4 billion ($2.5 billion). The Gulf emirate's sovereign wealth fund, which has been on a high-profile buying spree in world capitals, reached the deal to buy Asia Square Tower 1 located along Marina View at Marina Bay. As per the deal, the Qatari fund buys more than 1.25 million square feet of net lettable area in Singapore, BlackRock and Qatar Investment Authority said in a joint statement.

Duff & Phelps said the deal making outlook for Singapore and the region remained sombre in the coming months. "The sentiments are rather negative at the moment. It will be interesting to see how deal-making will shape up in 2017 and to what extent restructuring would contribute to the transactions landscape in our current times of uncertainty," Gopalakrishnan said.