(April 2): The race is far from over, but the Asia Pacific (Apac) has come out of the blocks much faster than the US and Europe in dealmaking activity this year.

The volume of mergers and acquisitions (M&As) in Apac is up 19% from the first quarter last year, helped by pending blockbusters such as the sale of CK Hutchison Holdings Ltd’s ports and convenience store operator Seven & i Holdings Co. That growth rate outshines the US’ 13% and leaves Europe firmly in the shade, with volumes sliding 14% there, data compiled by Bloomberg show.

“Companies and financial sponsors across Asia are more actively pursuing M&A than we’ve seen in the past three years,” said Raghav Maliah, global vice chairman of investment banking at Goldman Sachs Group Inc.

The heftier size of deals is an encouraging sign for the rest of the year, Maliah said, adding that corporate governance reforms in countries such as Japan and South Korea are also helping to lift positivity in the region.

Goldman, the only investment bank working on Hutchison’s ports sale, tops the global league table for deals advisory this year.

“There’s now more appetite for M&A across the region, and particularly more so in China,” said Samson Lo, Hong Kong-based co-head of Apac M&A at UBS Group AG. “Companies, and even more so financial sponsors, are under increasing pressure to deploy capital and also exit some of their investments.”

While the numbers are encouraging, market volatility and geopolitical turbulence are sowing some doubt.

“Companies are still assessing the impact of new political measures including tariffs and how that’s going to affect global businesses,” said Richard Wong, head of Apac M&A at Morgan Stanley. “In general, deals are taking longer to materialise.”

Take-private deals are de rigueur in Hong Kong, even with the Hang Seng Index climbing more than 15% this year, putting it among the world’s top performers.

China Mobile Ltd and I Squared Capital are vying to acquire Hong Kong broadband provider HKBN Ltd, Bloomberg News has reported, while the top shareholder of ENN Energy Holdings Ltd has made an offer that values the Chinese gas distributor about HK$90.5 billion (US$11.6 billion, or RM51.58 billion).

Hong Kong is the world’s second-biggest market for share sales this year. In March, the financial hub had its two largest stock offerings since 2021, with Xiaomi Corp — on an expansion into electric vehicles — and BYD Co raising about US$11 billion. Second listings are also a strong source of deals, including Contemporary Amperex Technology Co. Ltd’s potential US$5 billion share sale.

Further west to India, activity may start picking up later this year after a lull in early 2025, according to Rahul Saraf, head of investment banking for Citigroup Inc. in the country. India had a record year for initial public offerings (IPOs) in 2024 and the benchmark Sensex hit an all-time high in September. But it is down about 11% since then.

“Geopolitics has been the hottest topic at every dinner or coffee table, and rightly so,” Saraf said, adding that he is “quite optimistic for more deal flow” with three quarters to go this year.

Arun Saigal, head of financing and M&A for Barclays Plc in India, said M&A could pick up in the next 12 to 18 months amid a volatile equity market.

Volatility may lead to some opportunistic transactions elsewhere, said Antonio Puno, head of Southeast Asia investment banking at Bank of America Corp. Sectors to watch include healthcare, digital infrastructure and financial institutions, he said.

Overall the picture is improving, Morgan Stanley’s Wong said.

“There’s definitely some good momentum,” he said. “Now, the question is how much of that will eventually translate into deal announcements.”

Uploaded by Jason Ng