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Busiest January for global M&A since 2011, with Asia in spotlight

[LONDON] The value of merger and acquisition (M&A) deals worldwide soared 28 per cent in January compared with the same month last year, with the Asia-Pacific region enjoying its best start to a year on record, according to Thomson Reuters data.

It was the busiest January for M&A transactions since 2011, with deals totalling US$232.9 billion. Deals in the Asia-Pacific accounted for 43 per cent of the total, up from 20 per cent last January, beating both Europe and the United States.

Deals targeting US and European companies were down 13 per cent and one per cent respectively, underscoring the volatility business leaders predicted for the sector at the World Economic Forum in Davos, Switzerland, late last month.

Chief executives and bankers at Davos told Reuters an unstable economic backdrop with divergent monetary policies among leading nations, and the possible flare up of conflict zones and diplomatic tensions, posed big risks to the sector, though a strong dollar and robust growth at home would encourage US firms to strengthen their positions in global markets.

US companies acquired the most foreign targets in January, making 118 outbound M&A deals worth US$50.3 billion and accounting for nearly half of all cross-border M&A, which had its best start to a year since 2006. The most targeted country by value was Britain, followed by the United States.

The year's biggest deal so far is Hong Kong billionaire Li Kashing' reorganizing of Cheung Kong Holdings Ltd and Hutchison Whampoa Ltd. At US$47.7 billion, the value of that deal was more than that of the next three biggest deals combined.

The Hong Kong deal was one of eight so-called mega-deals in January. The deals, worth US$5 billion or more, totalled US$114 billion for the month, the highest level since January 2011.

Of this year's eight mega-deals, three were in the financial sector and two were telecoms transactions. Energy and power, materials and healthcare accounted for the remaining three deals.