M&A made up the bulk with $135.86b across 688 deals.
Singapore retained its top rank in deal making after recording a total of 857 deals including mergers & acquisitions (M&As), private equity (PE) and venture capital (VC) investments and initial public offerings (IPOs) worth $145.74b (US$106.2b) in 2018, according to Duff & Phelps' Transaction Trail Annual Report 2018.
M&A comprised the bulk of the deal volume in Singapore, making up 688 deals of the 857 valued at $135.86b (US$99b) compared to the 698 deals valued at $103.47b (US$75.4b) in 2017.
“A notable change has been seen in the overall deal values as well as in the size of transactions which have substantially increased over time, especially for Singapore,” Duff & Phelps managing director Srividya Gopalakrishnan said in a statement. “The appetite for outbound transactions as well as the number of mega-deals continues to grow.”
According to the report, M&A deal values continued to be driven by sizeable outbound M&A transactions by sovereign wealth funds (SWFs) GIC and Temasek Holdings. Outbound deals accounted for 458 of the M&A deals, registering $122.27b (US$89.1b).
These were complemented by M&A deals such as Philippines-based San Miguel Corp’s acquisition of power generation company Masin-AES for $2.61b (US$1.9b), ESR-REIT’s merger with Viva Industrial Trust for $1.51b (US$1.1b) and CapitaLand’s acquisition of a multifamily property portfolio in the US for $1.15b (US$835m).
Domestic transactions contributed 10% of total M&A deal value, with 230 deals valued at $13.59b (US$9.9b) in 2018 with the banking, financial services and insurance (BFSI) sector overtaking real estate in contributing the most domestic M&A deals, according to the report.
“BFSI contributed approximately 33% to the deal volumes, whilst real estate contributed the most to deal volume, accounting for 22.8% of the deal volume in Singapore with a total of 157 deals,” Duff & Phelps said in a statement. “Based on M&A deals, the top three sectors which includes BFSI, real estate and materials accounted for 67% of total deal values.”
Meanwhile, PE and VC investments in Singapore companies achieved record deal volumes with 154 investments in 2018 compared to the 125 seen in 2017. Total PE and VC investments in Singapore accounted for $9.06b (US$6.6b) in deal value for 2018, the report found.
“Whilst this was below the record high of $31.29b (US$22.8b) achieved in 2017 which was driven by sizeable PE and VC buyouts including the privatisation of Global Logistics Properties and the acquisition of Equis Energy, the total deal value in 2018 is significantly higher than in the years prior to 2017,” Duff & Phelps highlighted.
Notable PE and VC investments in 2018 for Singapore include the $3.43b (US$2.5b) investment in Grab Holdings by Toyota Motor Corp and other consortium investors, as well as the privatisation of Tat Hong Holdings by Standard Chartered Private Equity.
The technology sector also continued to be one of the largest contributors to PE and VC deals in the region, growing approximately 10 times from $922.19m (US$672m) in 2015 to $8.92b (US$6.5b) in 2018.
“In addition to the sizeable investment in Grab Holdings, the other top deals in the technology sector included the $2.33b (US$1.7b) investment in Go-Jek by Dianping.com, KKR, Tencent and other consortium investors, and the $1.37b (US$1b) investment in Tokopedia by SoftBank Group and other consortium investors, reflecting positive investor interest in the sector,” Duff & Phelps added.
On the other hand, the report found that IPO listings in Singapore for 2018 were significantly below 2017 levels with a total of 15 IPOs and capital raised on the Singapore Exchange (SGX) amounting to $717.71m (US$523m) compared to the 19 IPOs in 2017 which raised $5.08b (US$3.7b) led by Netlink Trust.
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