Merger and acquisition deals during the first three months of this year fell to the lowest level since 2012 on the back of mounting political uncertainties, according to news provider Mergermarket on April 25.
A total of 62 deals worth US$8 billion were struck in the first quarter, down 39.4 percent from 79 deals worth US$ 13.2 billion in the same period last year. The figure is the lowest since the US$3.9 billion posted in the same period of 2012. On year, M&A activity plunged 51 percent to US$6.1 billion.
“With political uncertainties surrounding former President Park Geun-hye’s impeachment, Korean firms have become less attractive to buyers during the start of the year,” Mergermarket said in the report. Consequently, the country’s deal-making market share in Asia-Pacific region in the first quarter fell to 5.9 percent from 8.4 percent.
Inbound and outbound activity remained robust.
There were a total of 10 inbound deals to Korea worth US$1.2 billion during the first quarter, jumping from $705 million in the same period last year.
“Despite the on-going (THAAD) missile shield dispute, China has been the strongest investor in Korea, making five deals worth US$1.3 billion, which accounted for nearly 70 percent of country’s total inbound activity,” Mergermarket said.
Overseas, Korea clinched deals worth US$1.2 billion, almost four times more than the seven deals worth US$305 million in the same period of 2016. The US and Japan were the most targeted markets with deals worth US$381million and US$360 million, respectively.
“Korean conglomerates’ outbound interest remains strong for the coming quarters as the need to expand or maintain their global footprint remains their biggest challenge,” the report said.
By Park Ga-young (firstname.lastname@example.org