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Singapore as ‘centre of gravity for M&A in SEA’ sees surge in deals from global investors

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SINGAPORE: Singapore has become a hotspot for mergers and acquisitions (M&A) this quarter as investor confidence grows, thanks to the country’s stable economy and political environment.

The Edge Singapore reported that several major deals have recently been announced.

A consortium led by KKR & Co. and Singapore Telecommunications Ltd. has agreed to invest S$1.75 billion in ST Telemedia Global Data Centres, outbidding other global investors.

This is just one example of the increasing activity, with Europe’s largest insurer, Allianz SE, also in talks for a potential partnership with Income Insurance Ltd.

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In an interview, Martin Siah, Bank of America Corp.’s Singapore Country Head stated that Singapore is “clearly the centre of gravity for M&As in Southeast Asia.”

He highlighted that the positive sentiment towards large, transformative inbound M&A from Singapore is higher than in recent years. This renewed confidence is promising for the latter half of the year and into 2025.

The value of deals involving Singaporean firms since April has increased by 102% from the second quarter of last year, reaching S$23.8 billion, according to Bloomberg data.

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These deals are numerous and significant, reinforcing Singapore’s position as a hub for Southeast Asia and attracting unprecedented inbound foreign direct investment, said Mr Siah.

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Bank of America has been a key advisor in notable deals, including the KKR-led investment in ST Telemedia Global Data Centres and the sale of a majority stake in Fullerton Health to Far East Drug Co. in April.

Tao Koon Chiam, head of Southeast Asia M&A at Ashurst ADTLaw, noted that many recent deals have been in the works since mid to late last year.

The current pace of transactions indicates that investors are taking a long-term view of the economic situation and are ready to invest in promising assets.

Mr Chiam explained that while there was always interest in good assets, economic concerns previously held investors back. Now, valuation gaps have narrowed as sellers aim to offload non-core assets or raise cash for future acquisitions.

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Additionally, there is pent-up demand from buyers after a quiet period in the market.

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Economists predict Singapore’s economy will grow by 2.4% in 2024, according to a survey by the Monetary Authority of Singapore. Meanwhile, the benchmark Straits Times Index has risen more than 8% from an October low.

According to Mr Chiam, Singapore’s strong corporate governance and predictable political environment also contribute to its attractiveness and competitive edge.

Ashurst has been actively involved in key transactions this year. The law firm advised London-listed alternative asset manager Intermediate Capital Group on its investment in Alfa Medicus Pte, a private surgery operator in Singapore.

They also assisted Carousell, a local company, purchase LuxLexicon Pte, a luxury bag reseller.

Other notable deals include Oversea-Chinese Banking Corp.’s move to take full control of Great Eastern Holdings Ltd. with a S$1.4 billion offer.

Shell Plc is acquiring liquefied natural gas trader Pavilion Energy Pte from Temasek Holdings Pte for the energy sector.

Additionally, France’s Séché Environnement announced the purchase of hazardous industrial waste collector ECO Industrial Environmental Engineering Pte for S$605 million. /TISG

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