S’pore M&A activity to be real estate dominated in 2011: analysts

Merger and acquisition activity in Singapore almost doubled this year compared with 2009, led by financial services and real estate, according to Thomson Reuters data.

Total value of announced deals stood at 40.7 billion US dollars, which included SGX’s proposed 8-billion-dollar takeover offer for the Australian Securities Exchange.

Analysts say real estate is likely to dominate the M&A scene next year as local REITs and property firms continue to beef up their regional portfolios.

Outbound Singaporean acquisitions jumped fivefold this year compared with 2009 to 23.2 billion US dollars.

The top three outbound deals were:
SGX-ASX (8 billion dollars)
CapitaLand China-Orient Overseas Developments (2.2 billion dollars)
Investor Group-Banco BTG Pactual (1.8 billion dollars)

Led by SGX’s massive 8 billion dollar takover bid for the Australian Securities Exchange, Australia and Hong Kong were the two biggest destinations for Singapore takeovers.

Vishal Sharma, executive director, KPMG Corporate Finance, said: “I think real estate is going to be a significant sector going forward. There are a lot of REITs listed in Singapore – I think they are all looking for portfolio acquisitions of assets and I think that’s going to be a theme which is fairly significant in the coming year.”

Oil & gas and power are also expected to account for a bigger part of M&A activity, following a 45 per cent fall this year.

Amitava Guharoy, managing director, Advisory, PWC, said: “Financial services will continue to see activity, but I would think the resources sector would also see a lot of activity in 2011.

“There are a lot of developing economies which are looking at resources like coal, certainly oil and … gas related services would also see a significant level of activity.”

In the absence of another deal as big as the SGX-ASX merger, analysts say the average size of transactions announced next year is unlikely to match this year’s, but the number of deals is expected to be larger.

Source : Channel NewsAsia – 20 Dec 2010

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