Covid-19: Asia M&A deals at $29.9 bln in May, lowest in 3 years, says report

In April, 855 such deals worth $52.6 billion were recorded.

M&A activity has been hit by the global covid-19 pandemic, as lockdowns across counties have hit movement, leading to hurdles for companies to evaluate and execute such transactions. Balance sheet stress due to a steep fall in revenue in various sectors has also made companies averse to M&As.

The decline came despite a slight uptick in global M&A activity, which saw deals worth $100.6 billion in May, up 9% from the April slump, when transactions fell to their lowest monthly value since September 2004. Despite the 9% growth in May, global deals were 65% lower year-on-year.

In the first five months of 2020, Asia Pacific recorded deals worth $249.9 billion, down 10% on year, and the lowest year-to-date level since 2013. But in a subdued global M&A landscape, the region’s contribution to overall deals, by value, increased to 28% from 18% at this time last year.

Globally, $903.1 billion worth of deals were announced during the first five months of 2020, down 43% compared to last year and the lowest year-to-date level since 2013.

In terms of cross border M&A transactions, even as deals grew 12% month-on-month to $30.4 billion in May, it was the second lowest monthly value for such deals in 11 years. The value of deals recorded during April and May were also lower than any other month since May 2009. At $258.7 billion worth of deals during the first five months of 2020, the deal value fell 39% compared to last year and was the lowest year-to-date total since 2013.

Billion dollar deals, too, showed the second lowest tally in May in the past 15 years. Fourteen deals worth $1 billion or more were announced in May, compared with 38 deals in the year-ago period. The number of billion-dollar deals in May, however, was more than the 10 deals announced in April that saw the lowest monthly tally since September 2004. The combined value of billion dollar deals in May was $52.5 billion, the second lowest monthly total since August 2013.