Singapore corporates go on biggest-ever M&A spree

Merge lanes road sign

Singaporean companies went on a record-setting merger and acquisition (M&A) spree in the first half, with deal volume surging to $40 billion, more than double the $17.3 billion recorded in 2013, according to Dealogic.

The top three destinations for outbound M&A were Hong Kong, Australia and Brazil, accounting for $10.8 billion, $5.7 billion and $2.2 billion in volume, respectively.

"The surge in M&A has been driven by a few factors - firstly, the improving macroeconomic environment, which is leading to increased confidence amongst corporates," said Srividya Gopalakrishnan, managing director of consulting firm American Appraisal Singapore.

"Moreover, Singapore companies are looking towards more and more inorganic growth as the domestic market itself is small. In addition, the country's sovereign wealth funds have been fairly active on the M&A side which has pushed up deal activity," she said.

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Real estate was the most targeted sector by Singaporean acquirers, with three of the top five largest acquisitions coming from the space.

Singapore-listed Frasers Centrepoint's pending $3.5 billion acquisition of Australand Property Group, one of Australia's biggest property groups, is in line to be the city state's largest outbound real estate M&A deal on record.

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The retail and finance sectors were also hot spots for M&A, with state investor Temasek Holdings' $5.7 billion acquisition of health and beauty retailer AS Watson Holdings and Oversea-Chinese Banking Corp's (OCBC) $5.0 billion pending bid for Wing Hang Bank.

Global M&A frenzy

M&A activity has been on the rise across the world, with global volume up 35 percent on year at $1.75 trillion in the first six months of the year - the highest first-half volume since 2007.

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Healthcare and technology have been the most active industries in deal-making, with Facebook's $19.4 billion bid for WhatsApp in February 2014.

Deals valued over $10 billion totaled 13 at $368.2 billion in the second quarter, almost five times the $74.1 billion announced in the same period last year.

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