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Singapore sees sudden frenzy in M&A deals from around the world

ANN/THE STRAITS TIMES – Singapore has turned into a hive of activity for mergers and acquisitions (M&A) this quarter as investor confidence returns, helped by the nation’s relative economic and political stability within Southeast Asia.

The flurry of action in just the past few days includes a Singtel-KKR consortium agreeing to invest USD1.75 billion in ST Telemedia (STT) Global Data Centres, beating other global investors. More are likely coming, including Europe’s biggest insurer Allianz discussing a possible tie-up with Income Insurance.

Singapore is “clearly the centre of gravity for M&A in Southeast Asia”, Bank of America’s Singapore country head Martin Siah said.

“Sentiment towards 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 added.

Overall, the value of deals involving Singapore companies since the start of April is up 102 per cent from the full second quarter of 2023 at USD23.8 billion, according to data compiled by Bloomberg.

It is not just 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.

The value of deals involving Singapore companies since the start of April is up 102 per cent. PHOTO: THE STRAITS TIMES

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

Head of Southeast Asia M&A at Ashurst ADTLaw Chiam Tao Choon said many of the recent deals have been in the works since mid- to late 2023. 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 is also pent-up demand from buyers after a quiet few years in the market, he added.

Economists expect Singapore’s economy to expand 2.4 per cent in 2024, according to the Monetary Authority of Singapore’s latest survey. Meanwhile, the benchmark Straits Times Index has been advancing and is now more than eight per cent higher than an October low.

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

In 2024, law firm Ashurst advised London-listed alternative asset manager Intermediate Capital Group on its investment into Alfa Medicus, a private surgery operator in Singapore, as well as online marketplace Carousell’s purchase of LuxLexicon, a luxury bag reseller.

Some other deals signed or in the works include OCBC Bank getting closer to taking full control of Great Eastern Holdings with a USD1.4 billion offer.

In the world of energy, Shell is buying liquefied natural gas trader Pavilion Energy from Temasek.

Meanwhile, French industrial group Seche Environnement just announced it is buying hazardous industrial waste collector ECO Industrial Environmental Engineering for USD605 million.