APAC M&A in 2022

Dealmakers are fully cognizant of the surgical speedbumps for the foreseeable quarters. The M&A market is trying to move forward amid headwinds, including supply-chain challenges, geopolitical tensions, energy and food scarcity, China’s zero-COVID-19 policy, rising interest rates and inflation. While China’s draconian pandemic policies and runaway inflation are all clouding the economic outlook, investors are particularly concerned about the prospect of the United States’ Federal Reserve raising interest rates so aggressively that the world’s largest economy tips into recession — taking much of the rest of the world with it.

M&A activity in Asia Pacific has struggled to gather any momentum this year as deal volumes have decreased by 27% in YTD 2022 (aggregated US$678bn) and number of deals from APAC have contributed for just 30% of total global M&A. In first six months of 2022, APAC M&A deal making totalled US$532bn (down 6% Y-o-Y), while M&A activity in China slumped to US$180bn in announced deals (down 26% Y-o-Y). Going by the current trend, the overall growth in APAC markets may end this year in the red zone.

Overall, the sentiment across the Asia Pacific region is a far cry from expectations at the start of the year. On the flip side, dealmakers have an opportunity to find good reasons to reset their strategic priorities and make bold moves to get deals done in the areas of their M&A pipeline that matter the most.

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Rajat Napal
Group Manager, Corporate and Investment Banking LoB Posts

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