APAC’s dynamism keeps M&A ticking along

M&A in Asia Pacific (APAC) declined in 2022, mirroring the post-boom comedown and relative dearth of megadeals witnessed across the globe. Unique to the region was China’s staunch zero-COVID policy, which involved mass lockdowns in major cities that inevitably hampered deal activity. However, Beijing made a decisive U-turn in December that holds promise for the near-term outlook. Following widespread protests, the government relaxed COVID-related restrictions. This led to a surge in infections, but suggests China may soon be able to return to pre-pandemic life as natural immunity develops across the population.

In another positive sign, Asia’s largest economy seems to be getting its simmering real estate debt crisis under control. Bonds issued by China’s heavily-indebted property developers rallied by around 50% from their record lows in November, responding to actions taken by authorities to support the struggling sector.

The reopening of the Chinese economy is being hotly anticipated as a much-needed spur to growth and will surely deliver more deal activity.

Dynamic scope

China and India are reaching an important inflection point. It is expected that India will finally rise to become the most populous country in the world in 2023 as the Chinese population begins to plateau and by 2050 will be 8% smaller than it is today.

The Chinese government’s ambitions to transition to a more autonomous economy driven by domestic consumption is a sign of its maturity. India is at a different stage in its development and has bright prospects, both in the immediate and longer terms. A large and fast-growing economy, huge consumer market, skilled and educated workers, improved business, tax and regulatory environment, and rapid growth sectors such as technology, e-commerce, healthcare, and renewable energy make it one of the most compelling M&A markets in the world.

APAC is an impressively dynamic regional economy and the relative strength of deal activity through the weaker H2 2022 holds promise for 2023.

Published in association with Datasite, Deal Drivers Americas provides an in-depth review of M&A activity in 2022, as well as a look ahead to 2023.

The report is also available on datasite.com.