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Southeast Asia M&A on track for a bumper year, BofA says

By Andreas Ismar

02:10, 24 November 2021

View of modern skyscrapers in the Singapore's CBD district
View of modern skyscrapers in the Singapore's CBD district - Photo: Shutterstock

Mergers and acquisitions (M&A) in Southeast Asia are on track for a bumper year, even as the region is reeling from the outbreak of the delta variant, driven by maturing technology start-ups and telecommunication companies.

In the first nine months of the year, M&A values amounted to $149.3bn, nearly triple the amount reached in the whole of 2020, and already hitting the highest ever recorded, according to Mergermarket data.

“M&A is on track for a bumper year and there is plenty of carryover in the pipeline for next year as well,” James Love, head of Southeast Asia M&A at Bank of America (BofA), told

Tech, telcos lead the way

Maturing tech start-ups in the region have increased M&A activities, with the likes of an $18bn merger of Indonesia's ride-hailing major Gojek and e-commerce firm Tokopedia as well as a planned $40bn merger of Singapore-headquartered Grab Holdings with special purpose acquisition company (SPAC) Altimeter Growth.

Telecommunications firms were also busy, with Axiata's and Telenor’s $15bn merger and a proposed $6bn merger between CK Hutchison and Indosat Ooredoo.

“Within the traditional telco sector we have seen some long-anticipated consolidation, as well as ongoing interest in digital infrastructure as telcos look to unlock value in their assets,” said Love.

Emerging sectors

“Unicorns are mushrooming across the region and that has created a vibrant private capital market and that theme will continue to grow in the next few years,” Sunil Khaitan, head of Southeast Asia equity capital markets at BofA, told

“Another big theme to play out is data centres. Going forward, Singapore is likely to emerge as a location of choice for not just Asia-focused data centres, but global data centres as well,” he said.

Love said: “SREITs (Singapore real estate investment trusts) with exposure to new world sectors such as data centres, logistics and business parks will continue to attract a strategic premium over traditional bricks and mortar like retail, hospitality or office.”


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Love added that digital health and medical tech companies are also emerging as a new growth sector in the region.

Changing approach on public listing

Most start-up firms had been banking on SPAC transactions as their route for premium valuation and accessing the highly liquid US capital markets, but such mindset has been changing ever since Indonesian e-commerce firm Bukalapak’s record $1.5bn local listing in August.

Khaitan said: “What's interesting is that companies including those below unicorn stage are now considering going through the public market route as well and are willing to trust their domestic markets to give them the suitable valuation.”

Love described that discussions on public listing currently is “a far more nuanced” talk. “We spend a lot of time with clients debating the merits of de-SPAC or domestic IPO as a route to market.”

“De-SPAC transactions can still get done but they’re not for every company and require more creative structuring to achieve deal certainty,” said Love.

Upbeat mood

“This time last year when we were looking into 2021, there was less certainty of how the year was going to be. However, to date, ECM (equity capital market) volume, especially on the IPO front, is looking extremely robust. Same story for M&A,” said Martin Siah, head of Southeast Asia global corporate and investment banking.

“To sum it up, we've never been so active and busy. And we remain very positive in terms of the outlook for Southeast Asia investment banking,” said Siah.

Read more: Assets of ASEAN-focused PEVCs doubled in five years

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