SEA middle class boosts M&A activity by more than 40%

APAC remains bright spot for M&A activity.

Early-stage mergers & acquisitions (M&A) activity in Asia-Pacific (APAC) is showing a 9.7 percent growth compared to the same period last year.

According to a release from Intralinks, specifically, the Southeast Asian region that includes Singapore, Malaysia and Indonesia is demonstrating a 44 percent increase in early-stage M&A activities, which means that there will be a spike in M&A activities in this region in six months’ time.

This is according to the Deal Flow Predictor (DFP) report released by Intralinks® Holdings, Inc. (NYSE:IL), the leading global provider of software and services for managing M&A transactions.

In general, the APAC region with the exception of Australia, remains the bright spot for early-stage M&A activity this year as compared to other regions -- North America (NA), Europe, the Middle East and Africa (EMEA) and Latin America (LATAM).

Here's more from Intralinks:

“Southeast Asia is once again demonstrating its attractiveness as a destination for acquirers with the highest growth in early-stage M&A activity in the APAC region so far this year, driven by increased deal pipelines in the Consumer and Industrials sectors,” said Philip Whitchelo, vice president of strategy & product marketing at Intralinks. “Southeast Asia has consistently shown its ability to ride out the economic bad news and market turbulence stemming from China, as dealmakers look for acquisitions to benefit from the regions’ fast-growing economies and growing middle class.”

Looking at early-stage M&A activity by sector across the APAC region, the Industrials, TMT (Telecommunications, Media & Technology) and Healthcare sectors are showing the greatest increases in early-stage deal flow, whereas the Materials and Energy & Power sectors are showing decline. The decline in the Materials sector is reflective in the early-stage M&A downturn for Australia.

“Australia continues to experience a downturn due largely to the country’s M&A market’s historic dependency on the Metals and Mining, which has been hit hard by the collapse in commodity prices and weakening Chinese demand. In Australia, the question now is what local dealmakers will do to encourage deal activity and make up for the shortfall,” continued Whitchelo.