Hong Kong M&A amount to a whopping $55.3b in 2011

HK M&A captures 12% of Asia M&A

Hong Kong-involvement M&A has reached US$55.3 billion from 1,010 deals so far this year, a decline of 10% from 3Q 2010 levels. M&A deal flow for the Asia ex Japan region has reached US$449.1 billion, a 15.9% increase from the third quarter of 2010 despite the 7.1% decline in the number of M&A deals. Hong Kong accounts for 12% of the regional market share.

OUTBOUND ACQUISITIONS TARGET ENERGY & POWER

•The deal values for Hong Kong M&A are driven by the record US$26 billion of outbound M&A activity, the highest M&A volume on record for a third-quarter period.
•Even with a 23% decline from the same period in 2010, Energy & Power remains the most targeted industry for Hong Kong initiated outbound acquisitions, largely due to UK Water’s buyout of Northumbrian Water Group for US$7.5 billion.

INBOUND ACQUISITIONS DRIVEN BY SINGAPORE

•Singapore is the largest acquirer of Hong Kong entities, marked by the acquisition of Hong Kong’s Festival Walk Mall by a consortium of Singaporean investors including Temasek Holdings and Mapletree Investments for US$2.5 billion; propelling Real Estate to the top target sector for inbound M&A deals.

“Market turmoil does little to hinder M&A sentiment in Hong Kong as deal values climb 61% over 2Q2011 to reach US$25 billion for the third-quarter, it is difficult to evaluate Hong Kong’s M&A activity without considering China’s M&A momentum as deal structures are inexplicably linked. As China and Hong Kong entities become more adept and sophisticated at acquiring overseas assets, we’re seeing the continued increase in resource-driven outbound activity (Energy & Power, Materials) and a rise in PE-backed M&A transactions,” said Amy Wang, Senior Research Analyst from Thomas Reuters Deals Intelligence, Asia Pacific.