HONG KONG: Mergers and acquistions (MA) loan volume in Asia reached US$46.6 billion (RM146.5 billion) last year, almost twice that of 2010′s US$26 billion, according to Thomson Reuters LPC.
Australasia saw US$16.8 billion of MA loan activities, while Japan witnessed US$15.2 billion and the rest of Asia had US$14.5 billion.
Australasia had the most number of MA loans, of which 24 were from Australia and four were from New Zealand. India was the most active Asian (excluding Japan) country with eight deals in total. And Australian banks also topped the 2011 Asia Pacific (excluding Japan) MA loans league table.
Last year saw several high-profile acquisitions and buyouts including Vedanta Resources’ acquisition of Cairn India and Lanco Infratech Ltd’s acquisition of Australia’s Griffin Coal.
Some market players were concerned that market volatility might discourage MA activity in 2012. ANZ’s global head of loan syndications, John Corrin, however argued that falling stock markets could mean more MA opportunities.
Sonia Li, managing director and head of syndicated and leveraged finance for Asia with JP Morgan, expected more corporate deals to surface on the acquisition front despite market woes, specifically for privatisations.
“Shareholders could take advantage of the drop in equity markets to buy back shares at a favorable price,” she said in an interview in late October. Also, while “the bond market continues to be volatile, influenced by global investor sentiment, the Asia Pacific loan market remains a reliable source of financing for acquisitions”.
China Construction Bank Hong Kong’s assistant general manager, Mickey Mehta, said in November that acquisition financing opportunities would drive volume, specifically from Indian/Chinese MA activities in strategic industries like resources.
By the end of 2011, the market was abuzz with a couple of big MA announcements. For example, a handful of lenders were working on a US$4bn three-year loan for Alibaba Group that would help the Chinese e-commerce giant buy back part of the 40% stake that Yahoo owned in the company.
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Article source: http://mmail.com.my/content/88256-merger-loans-almost-doubled-last-year
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