MANILA – According to the findings of a report by American financial giant Merrill Lynch, firms in Southeast Asia faced a slow pace on mergers and acquisitions (M&A) this year due to weak market conditions and slow economic growth.
“The region has been punching above its weight in recent years, and saw record levels of activity in 2014… However, the boom came to a grinding halt in the first nine months of this year,” Merrill Lynch’s Southeast Asia M&A Regional Report for 2015 read.
Last year, M&A deals in the region reached a record-high $140 billion. This slumped to $63 billion – less than half of the previous– recorded from January to September this year.
Major events such as the slowdown in the Chinese economy, lower commodity prices in Malaysia and Indonesia and political tensions in Thailand took a toll on Southeast Asia’s corporate deals.
“Confidence is low now,” the report further read, adding that several companies considered mega deals outside the region as they diversify their portfolios.
“2014 has been the year of the Chinese buyer overseas and in the coming years, there are signs that baton will soon be taken up by the Philippines and Thailand,” the report concluded.