Uninvited guests: unsolicited bidders come calling for Asian companies

Data InsightDealspeak 16 August

Uninvited guests: unsolicited bidders come calling for Asian companies

Firms in Asia-Pacific are increasingly being targeted with unsolicited bids, leaving the region with the highest count of this type of transaction.

In 2022 year-to-date (YTD), APAC recorded 121 unsolicited bids worth USD 42.87bn, surpassing EMEA (25 deals valued at USD 23.59bn) and the Americas (21 deals worth USD 62.1bn).

The region also generated its highest value on Dealogic record, surpassing its previous high set in 2021 YTD (USD 41.17bn across 37 deals).

Down Under on top

For the second year in a row, Australia holds first place in APAC in terms of deal value, with 11 deals worth USD 26.7bn, thanks largely to the USD 21.04bn acquisition of Ramsay Health Care by a consortium led by KKR.

China is experiencing a boom in both the volume and value of unsolicited bids, jumping to 36 deals with a combined value of USD 13.64bn from only one for USD 52.6m a year ago. In 2022 YTD, the Middle Kingdom has accounted for the second-, third- and fourth-largest unsolicited deals in APAC:

  • The sale of a 35% stake in Shandong Airlines to Air China for USD 3.23bn.
  • The sale of VNET Group, a Chinese carrier and provider of cloud-neutral internet data-center services, to Hina Group and Industrial Bank for USD 2.63bn.
  • The sale of a 66.5% stake in Deppon Logistics for USD 1.85bn.

South Korea has also been party to a robust increase in unsolicited bids, targeting mostly small and mid-sized targets. The country recorded 31 deals worth USD 903.2m, up from one deal for USD 48.6m in 2021 YTD.

The most eye-catching deals in South Korea have come in the entertainment sector. The largest unsolicited bid this year has been the acquisition of a 14.3% stake in multiplex cinema operator CJ CGV for USD 115.m by its parent company, South Korean conglomerate CJ Corp [KRX:001040]. This is followed by the sale of a 28.56% holding in Showbox [KOSDAQ:086980], a film distribution unit of Orion Holdings [KRX:001800], to Maum Studio and Maum Capital for USD 107.1m.

Tech companies proving magnet for bidders

Technology has seen the largest deal volumes across Asia-Pacific, with 37 tie-ups worth USD 6.53bn, which equates to 4.6x growth in the number of transactions and a 7.1x jump in value from the same period a year ago. The largest unsolicited sector deal is the sale of China’s VNET Group.

Healthcare tops the APAC sector chart in terms of value, driven by the sale of Ramsay Health Care. Transportation (USD 5.66bn across three deals) and finance, which has seen value jump 3.1x year-on-year to USD 2.3bn, came in third and fourth, respectively.

Second-half slowdown

The number and volume of unsolicited bids plunged in July and August, with dealmaking struggling to gain momentum. The question is whether this can be attributed simply to a summer lull or whether there are others factors at play. Surging interest rates, an uncertain geopolitical climate and looming global financial crisis do not bode well for the rest of the year. Yet, according to an old Chinese proverb, crisis is an opportunity riding a dangerous wind, and uninvited bidders may come knocking on the doors of companies hit by squeezed liquidity.

Your M&A Future. Today.

Next-generation Mergermarket brings together human insights and machine intelligence to deliver groundbreaking predictive analytics.

Be the first to know with next-generation Mergermarket

Book a demo today