M&A deal volumes rise but values drop in H1 2016: Duff & Phelps

MERGER and acquisition (M&A) deal volumes rose in Singapore in the first half of the year, but their values have declined by about 35 per cent compared to the same period a year ago, said global valuation and corporate finance adviser Duff & Phelps.

The industrials sector was the largest contributor to M&A deal values, accounting for 30 per cent of overall deal value, overtaking the technology sector which ranked top last year but has since moved to fourth place. The top three sectors - industrials, real estate and banking and financial services - accounted for 72.4 per cent of total deal value, according to Duff & Phelps.

Singapore recorded 383 deals, including M&A, private equity and initial public offerings worth US$43.4 billion in the first half of the year, compared with 685 deals worth US$103.8 million for the full 2015 year.

These were mainly driven by M&A transactions by sovereign wealth funds, GIC and Temasek Holdings in consortium and stand-alone investments, complemented by other prominent deals such as CMA CGM's acquisition of Neptune Orient Lines, Qatar Investment Authority's acquisition of Asia Square Tower 1 and Alibaba Group's acquisition of a stake in Lazada South East Asia.

Managing director of Duff & Phelps Srividya Gopalakrishnan said that the firm saw significant interest from Asian and American companies to acquire UK and European assets during the first half of 2016.

"We cannot but wonder how the 'new normal' 'Brexit' situation will impact these going forward," she added. "It will be interesting to see how deal-making will shape up for the rest of the year and to what extent restructuring would contribute to the transactions landscape going forward."