Cross-border mergers and acquisitions rebound in Asia as dealmakers look for growth abroad By Reuters

By Kane Wu and Yantoultra Ngui

HONG KONG/SINGAPORE (Reuters) – Cross-border mergers and acquisitions involving companies in the Asia-Pacific region have rebounded this year and are booming in Japan as companies seek new growth after adjusting to against higher interest rates.

The total announced value of such deals rose 25 percent year-on-year to $286 billion as of Sept. 30, LSEG data shows, with about 80 percent of them transacted with an entity outside the region.

“There was a notable increase in cross-border transactions as political stability returned to some markets, while pent-up demand for investment and transactions and adjustments to higher interest rates began to drive M&A activity again” , said Andre Gan, an M&A agent. partner at Wong & Partners, a member law firm of Baker McKenzie in Kuala Lumpur.

Overall, M&A in Asia totaled $622 billion in the first nine months of the year, down 0.2 percent from the same period in 2023, LSEG data showed.

The cross-border recovery has been fueled in part by a series of megadeals, including Canada’s Alimentation Couche-Tard’s $38.5 billion takeover bid for Japanese department store owner Seven & i Holdings, the largest announced M&A deal globally this year.

Rupert Murdoch-controlled Australian firm REA Group also bid aggressively for British real estate portal Rightmove ( OTC: ), sweetening its offer to $8.3 billion after three previous bids were rejected.

Japan will lead the region’s multibillion-dollar deals, bankers said, as relaxed corporate governance rules have made its public companies more open to takeovers, while some of the local champions look to expand overseas.

Inbound M&A from Japan rose more than 16-fold so far this year to a record $74 billion, while outbound deals rose 49 percent to $50 billion, they showed LSEG data.

Texas-headquartered real estate investor Hines, which owned and operated $93 billion in assets as of June 30, is actively seeking opportunities globally, including in Asia, its chief financial officer told Reuters this month. investment for Asia, Ng Chiang Ling.

Having acquired some assets in Japan and Singapore this year, Hines also sees opportunities in Australia, Ng said.

In Southeast Asia, cross-border transactions are on the rise. German insurer Allianz ( ETR: ) announced in July that it plans to buy a majority stake in Singapore Income Insurance for about $1.6 billion to strengthen its foothold in Asia.

“Looking forward, 50% of the APAC pipeline is made up of global cross-border deals,” said Rohit Satsangi, Deutsche Bank’s co-head of mergers and acquisitions, Asia Pacific.

Satsangi said he expects a resurgence of activity by China’s state-owned companies looking for renewable and natural assets globally.

A return to China would be welcomed by traders. Outbound deals from China totaled $14 billion so far this year, down 8 percent year-on-year and at the second-lowest level in a decade, LSEG data showed.

Wong & Partners’ Gan said he expects the overall outlook for M&A in the region to improve, including for deals that have not crossed borders.

“In 2025 and 2026, given the recent easing of interest rates by the US Fed and the conclusion of the US election in late 2024, we expect continued stability to lead to a resurgence of M&A activity,” said he.

($1 = 1.2801 Singapore dollars)