Cross-Border M&A Recovers in Asia as Dealmakers Seek Growth Opportunities Abroad

By Kane Wu and Yantoultra Ngui

HONG KONG/SINGAPORE – Cross-border mergers and acquisitions (M&A) in the Asia-Pacific region have rebounded this year, particularly in Japan, as companies adapt to higher interest rates and seek new growth opportunities.

As of September 30, the total value of announced cross-border deals rose by 25% compared to the previous year, reaching $286 billion, with approximately 80% involving entities outside the region. According to Andre Gan, an M&A partner at Wong & Partners in Kuala Lumpur, "There has been a notable pick-up in cross-border transactions as political stability returned to some markets, driving a resurgence in investment and dealmaking alongside adjustments to higher interest rates."

Overall, M&A activity in Asia reached $622 billion in the first nine months of the year, reflecting a slight decline of 0.2% from the same period in 2022.

The recovery in cross-border transactions was significantly influenced by several high-profile deals, such as Canadian company Alimentation Couche-Tard’s $38.5 billion cash bid for Japanese convenience store operator Seven & i Holdings, marking the largest announced M&A deal globally this year.

Additionally, the Australian firm REA Group, under Rupert Murdoch’s control, has actively sought to acquire the British real estate portal Rightmove, increasing its offer to $8.3 billion after previous proposals were turned down.

Bankers predict that Japan will be a major driver of multibillion-dollar deals in the region, thanks to relaxed corporate governance rules that have made local public companies more receptive to takeovers. Data shows that inbound M&A in Japan surged more than 16-fold this year, hitting a record $74 billion, while outbound deals rose by 49% to $50 billion.

Hines, a Texas-based real estate investor managing $93 billion in assets as of June 30, is exploring global opportunities, including those in Asia. The firm’s Asia chief investment officer, Ng Chiang Ling, mentioned the acquisition of assets in Japan and Singapore this year, with a keen eye on potential investments in Australia.

In Southeast Asia, cross-border transactions are gaining momentum. In July, German insurer Allianz announced plans to acquire a majority stake in Singapore’s Income Insurance for approximately $1.6 billion, aiming to strengthen its presence in Asia.

Looking ahead, Rohit Satsangi, Deutsche Bank’s co-head of M&A in the Asia Pacific region, stated, "50% of the APAC pipeline consists of global cross-border transactions." He anticipates a revival of outbound activities by Chinese state-owned enterprises seeking renewable and natural resource assets worldwide.

A rebound in China’s M&A activity would be welcomed by dealmakers, as outbound deals from China reached $14 billion so far this year, an 8% decline year-on-year and the second-lowest level in a decade.

Gan from Wong & Partners expressed optimism for the overall outlook of M&A in the region, including domestic deals. He noted, "Heading into 2025 and 2026, with the recent easing of interest rates by the U.S. Fed and the conclusion of the U.S. elections in late 2024, we expect stability to foster a resurgence of M&A activity."