Mergers and acquisitions to pick up in Asia: J.P. Morgan<\/p>\n
SINGAPORE (Dow Jones): The pace of mergers and acquisitions is
\nlikely to pick up in Asia as sharply depreciated asset values
\nbegin to stabilize, according to a key executive at J.P. Morgan
\nSecurities Asia Pte Ltd.<\/p>\n
Hurt by the crisis, Asian companies are now viewing tie-ups or
\ntakeovers as a way of improving their financial position, said
\nthe company's Singapore-based Managing Director Cezar Consing.<\/p>\n
Foreign companies, meanwhile, are taking advantage of
\nexpanding within the region at a much lower cost compared with
\npre-crisis values, he added.<\/p>\n
\"In terms of M&A (merger and acquisition) transactions, things
\nare looking up for Asia,\" Consing said in an interview with Dow
\nJones Newswires. \"When things stabilize, deals will get cut.\"<\/p>\n
J.P. Morgan Securities Asia is a unit of U.S. investment bank
\nJ.P. Morgan & Co. The group is involved in such areas as advising
\non mergers and acquisitions, asset management, managing
\ninvestment portfolios and raising equity and debt capital.<\/p>\n
The outlook for the region hasn't yet turned rosy for the
\nregion, Consing said. But, he said the increase in the number of
\nmergers and acquisitions is a sign that the region is on the
\nmend.<\/p>\n
The talk of mergers and acquisitions have so far exceeded the
\nactual level of activity, Consing said. He estimated that only
\nsome 30 merger-and-acquisition transactions valued at above
\nUS$100 million have taken place this year.<\/p>\n
For the rest of the year, the region could see about twenty
\nmore mergers, with each transaction valued at a minimum of US$100
\nmillion, Consing predicts.<\/p>\n
Consing, who's also co-head of the company's emerging Asia
\ninvestment banking division, said he and his colleagues were
\ninvolved in structuring the recent 45 percent stake sale of
\nNestle Philippines by San Miguel Corp to Nestle SA that was
\nannounced Friday.<\/p>\n
The Nestle Philippines transaction, valued at about 30 billion
\npesos (US$694 million), ranks as the largest single foreign
\ninvestment in the Philippines this year, he said, adding it's a
\nsignificant development in a region where liquidity is tight.<\/p>\n
The group was also recently involved in two mega transactions
\n- the merger of British Telecommunications Plc and AT&T Corp and
\nthat of British Petroleum Co and Amoco Corp.<\/p>\n
In Singapore, the group assisted in the merger between
\nSingapore's Neptune Orient Lines and American President Lines of
\nthe U.S. last year.<\/p>\n
J.P. Morgan Securities is currently involved in several other
\nmerger and acquisition deals, none of which has reached
\ncompletion, Consing said. He declined to provide details except
\nto say the merger candidates are \"all over the region\" and not
\nrestricted to any one industry.<\/p>\n
With the difficulties caused by the regional financial crisis
\nin raising cash from capital markets given widening interest rate
\nspreads, more and more Asian companies are likely to consider
\nmergers and acquisitions as a \"way of cashing out and spreading
\ngrowth,\" he said.<\/p>\n
It was less than two years ago, Consing pointed out, that
\nAsian companies were reluctant to sell, given the region's
\ntremendous growth potential.<\/p>\n
He said companies should increasingly realize that at a time
\nwhen markets are performing poorly and economies are weak, the
\nvalue of a company is of greater importance than control.<\/p>\n
\"I think there'll be more of these transactions, where you'll
\nhave non-Asian MNCs (multinational corporations) buying into
\nAsian companies,\" Consing said. \"That's because there's not
\nenough capital in Asia right now.\"<\/p>\n
In Asia's emerging markets, Consing said mergers and
\nacquisitions are \"all a part of the restructuring and healing
\nprocess,\" adding they will mean more efficient companies and a
\nmore competitive operating environment.<\/p>\n
As a practitioner, Consing said he hopes the recovery of Asian
\nmarkets doesn't retard the pace of mergers and acquisitions in
\nthe region.<\/p>\n
\"Hopefully, people realize that a good partnership and good
\nM&A transaction can do so much for a business,\" he said.<\/p>\n
In the months ahead, Consing said he expects to see more deals
\ndone, but adds it's likely the total value of these deals may not
\naccurately reflect the number of transactions because of the
\ndeflated asset values.<\/p>\n
For the year to-date, in Asia excluding Japan, about 414 such
\ntransaction have been completed totaling about US$17 billion in
\nvalue, according to J.P. Morgan data.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/mergers-and-acquisitions-to-pick-up-in-asia-jp-morgan-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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