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Singapore becomes hot spot for M&A bankers hunting Asia deals

Bloomberg • 3 min read
Singapore becomes hot spot for M&A bankers hunting Asia deals
Total deal value already 102% higher than second quarter 2023, as strong corporate governance, predictable politics boost appeal. Photo: Bloomberg
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Singapore has turned into a hive of activity for mergers and acquisitions this quarter as investor confidence returns, helped by relative economic and political stability.

The flurry of action in just the past few days includes a KKR & Co.-Singapore Telecommunications Ltd. consortium agreeing to invest $1.75 billion in ST Telemedia Global Data Centres, beating other global investors. More are likely coming, including Europe’s biggest insurer Allianz SE discussing a possible tie-up with Income Insurance Ltd. 

The city-state is “clearly the center of gravity for M&As in Southeast Asia,” Bank of America Corp. Singapore Country Head Martin Siah said in an interview. “Sentiment toward large transformative inbound M&A from Singapore is more positive than it has been in recent years,” raising confidence for the second half and 2025, he said. 

Overall, the value of deals involving Singaporean firms since the start of April is up 102% from the full second quarter last year at $23.8 billion, according to data compiled by Bloomberg.

It’s not only the number of deals – these are strategic and large transactions that place Singapore as the hub for Southeast Asia, with unprecedented inbound foreign direct investment by international names, said Siah, who joined BofA in 2015 after stints with Standard Chartered Plc and UBS Group AG. 

BofA was an adviser on the KKR-led STT data center deal. It also was an adviser on the sale of a majority stake in Singapore’s Fullerton Health to Far East Drug Co. announced in April.

See also: BlackRock buys Preqin for GBP2.55 bil in private data expansion

Tao Koon Chiam, head of Southeast Asia M&A at Ashurst ADTLaw, said many of the recent deals have been in the works since mid to late last year. The pace is “a signal that investors are taking a longer term view of the macroeconomic situation and prepared to invest in the right assets.”

“There was always interest in good assets, but investors were concerned about the economic outlook,” Chiam said. “In some cases, valuation gaps have narrowed as sellers are keen to offload non-core assets or want to raise cash to be ready to acquire more assets in the coming years.” There’s also pent up demand from buyers after a quiet few years in the market, he said.

Economists expect Singapore’s economy to expand 2.4% in 2024, according to the monetary authority’s latest survey. Meanwhile, the benchmark Straits Times Index has been advancing and is now more than 8% higher than an October low. 

See also: Accrelist to acquire 28.5% stake in MClean Technologies for RM9 mil

Singapore’s strong corporate governance and predictable political environment are also appealing and help it retain a competitive edge, Chiam said.

This year, Chiam’s law firm Ashurst advised London-listed alternative asset manager Intermediate Capital Group on its investment into Alfa Medicus Pte, a private surgery operator in Singapore, as well as locally based Carousell’s purchase of LuxLexicon Pte, a luxury bag reseller.

Some other deals signed or in the works include Oversea-Chinese Banking Corp. getting closer to taking full control of Great Eastern Holdings G07 -

Ltd. with a $1.4 billion offer. In the world of energy, Shell Plc is buying liquefied natural gas trader Pavilion Energy Pte from Temasek Holdings Pte. France’s Séché Environnement just announced it is buying hazardous industrial waste collector ECO Industrial Environmental Engineering Pte for S$605 million. 

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