Singapore has become a hive of activity for mergers and acquisitions (M&A) this quarter, reflecting a return of investor confidence driven by the island nation’s relative economic and political stability. Recent significant deals underscore Singapore’s position as the focal point for transformative M&A activities in Southeast Asia.
Recent M&A Activity in Singapore
In the past few days alone, a consortium led by KKR & Co. and Singapore Telecommunications Ltd. agreed to invest S$1.75 billion (RM6.1 billion) in ST Telemedia Global Data Centres, surpassing other global investors. Additionally, Europe’s largest insurer Allianz SE is in discussions with Income Insurance Ltd. for a potential partnership, and Hillhouse Investment is in talks to acquire Dulwich College International’s schools.
Singapore: The M&A Epicenter of Southeast Asia
Martin Siah, Bank of America Corp’s Singapore country head, described the city-state as “clearly the centre of gravity for M&As in Southeast Asia.” He highlighted the positive sentiment towards large, transformative inbound M&A from Singapore, which has significantly boosted investor confidence for the latter half of the year and into 2025.
Surge in Deal Values
Data compiled by Bloomberg reveals that the value of deals involving Singaporean firms since the start of April has surged by 102% compared to the full second quarter of last year, reaching US$23.8 billion. This increase is not just in the number of deals but also in the strategic and large-scale nature of these transactions, positioning Singapore as the hub for Southeast Asia with unprecedented inbound foreign direct investment.
Strategic and Large-Scale Transactions
Bank of America Corp was an adviser on the KKR-led STT data centre deal and also advised on the sale of a majority stake in Singapore’s Fullerton Health to Far East Drug Co. Tao Choon Chiam, head of Southeast Asia M&A at Ashurst ADTLaw, noted that many of the recent deals had been in the pipeline since mid to late last year, indicating that investors are now taking a long-term view of the macroeconomic situation and are prepared to invest in the right assets.
Economic Outlook and Investor Sentiment
Economists predict Singapore’s economy will expand by 2.4% in 2024, according to the monetary authority’s latest survey. The benchmark Straits Times Index has been advancing, now more than 8% higher than its October low. This positive economic outlook, combined with Singapore’s strong corporate governance and predictable political environment, makes the city-state an attractive destination for investors.
Notable Recent Deals
Several high-profile deals have recently been signed or are in the works, further emphasizing Singapore’s M&A momentum:
- Oversea-Chinese Banking Corp is moving closer to taking 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.
- France’s Séché Environnement announced its acquisition of hazardous industrial waste collector ECO Industrial Environmental Engineering Pte for S$605 million.
- Intermediate Capital Group invested in Alfa Medicus Pte, a private surgery operator in Singapore.
- Carousell purchased LuxLexicon Pte, a luxury bag reseller.
Conclusion
Singapore’s resurgence as a hub for mergers and acquisitions is a testament to its economic resilience and political stability. The influx of strategic and large-scale investments positions the city-state as a key player in Southeast Asia’s M&A landscape. As investor confidence continues to grow, Singapore is set to attract even more significant deals, further solidifying its status as the region’s M&A epicenter.
