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SINGAPORE – Buyout deals involving Singapore companies have surged in 2024, confirming the country’s status as a hub for mergers and acquisitions (M&As) in South-east Asia.
M&A turnover hit US$51 billion (S$66 billion) in the first nine months of 2024, up 29 per cent from the same period in 2023, noted the London Stock Exchange Group (LSEG).
The numbers account for buyouts that have been announced and pending, as well as completed ones.
Ms Elaine Tan, senior manager at LSEG Deals Intelligence, told The Straits Times: “Singapore as a global hub remains interesting for companies diversifying their supply chain and increasing exposure to South-east Asia”
She added that more transactions are on the cards, with continued interest in the financial, real estate and healthcare sectors here, saying: “We are cautiously optimistic about the outlook looking at the key drivers. Lower interest rates would encourage companies and investors as borrowing costs come down.”
The optimism is reflected in a recent EY survey that found that 98 per cent of Singapore and global chief executives plan some form of transaction in 2025.
It also noted that 50 per cent of Singapore respondents are planning an M&A, while 40 per cent will chase divestments or initial public offerings (IPOs) and 33 per cent aim to pursue a strategic partnership with a third party.
The jump in dealmaking here was underpinned by eight transactions above US$1 billion, with a cumulative total of US$16.2 billion.
These included the $1.5 billion purchase in August by Australia-listed Lendlease and US private equity giant Warburg Pincus of industrial assets from entities related to New York private equity firm Blackstone and Mr Lim Chap Huat, Soilbuild’s executive chairman.
There are also pending deals such as German insurer Allianz’s announcement in July that it intends to buy a majority stake in Singapore’s Income Insurance for $2.2 billion.
While the value of deals rose, the number of transactions fell 25.5 per cent from the first nine months of 2023.
Deals targeting Singapore companies, whether by a foreign or local buyer, reached US$18.8 billion, up 50.4 per cent from the first nine months of 2023.
Domestic M&As between Singapore companies totalled US$4.5 billion, up 15 per cent.
Inbound M&A activity, where a foreign company buys a local one, were valued at US$14.3 billion, 66.4 per cent higher than in the first nine months of 2023.
Outbound M&A, where a Singapore company targets a foreign one, bucked the trend. These fell to US$14.7 billion – a nine-year low and down 24 per cent compared with the same nine months in 2022.
The weaker outbound numbers were attributed to persistent global headwinds, uncertainties over interest rates and the various elections in 2024, Ms Tan said.
This sentiment was reflected in the EY survey, which found that 62 per cent of Singapore CEOs had paused or cancelled a transaction in the past year, most often over geopolitical uncertainty, valuation gaps and regulatory uncertainty.
One outbound deal stood out. Singapore real estate giant Mapletree Investments bought 8,192 student housing beds across 19 cities in Britain and Germany from Cuscaden Peak Investments in a transaction worth £1 billion (S$1.7 billion) in April.
Singapore’s financial sector was the most targeted segment here, accounting for 19.7 per cent of the M&A market share, with over 120 deals worth US$10 billion. This was up 36 per cent from the first nine months of 2023, when 151 deals worth US$7.4 billion were closed.
Real estate was next, with 15 per cent of the market in 45 deals totalling US$7.7 billion, up 16.2 per cent from a year earlier.
In contrast, the industrial sector saw a sharp fall, capturing US$4.5 billion or 9 per cent of the market share, down 44 per cent on the first nine months of 2023.
Preliminary data indicates that Morgan Stanley led the M&A league table involving Singapore companies, capturing deals worth US$5.5 billion for an 11 per cent market share.
Singapore equity and equity-related activity raised almost US$2 billion during the first nine months of 2024, down nearly 31 per cent from the same period of 2023.
There were 10 IPOs issued by Singaporean companies in the first nine months of 2024, raising US$104.8 million all up, 51 per cent than a year earlier.
Only one firm – cancer treatment provider Singapore Institute of Advanced Medicine Holdings – listed on the Singapore Exchange. The rest launched elsewhere, such as the United States and Hong Kong.
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