 Year-End 2007
Steaming into choppy waters
2007, while a record year for M&A, has ended with dark clouds on the horizon. A congruence of subprime write-downs and other fears have caused the stock markets to go through some of their most volatile months. Inflation is taking hold in most of Asia-Pacific and it poses a socio-political time bomb given the existence of low-income masses, widening wealth gap and the lack of social security cushion. The US economy, by most reckoning, is heading for a recession. A Democrat win in the US may also result in some protectionist changes affecting global trade, if the rhetoric at the primaries is to be believed. As the US is the largest consumer of Asia exports, the fear is that there will be a US-led global stagflation. Much has been made of the decoupling of Asia economies from the US, which in our mind is at best limited. No corporate or nation can be unaffected by the loss of its most significant customer. Unsurprisingly, most governments have since moderated their GDP growth projections for 2008.
The impact of these dark clouds on M&A in 2008 depends on how deep a recession the US economy falls into. There is certainly no lack of funds and cash-rich corporates ready to pounce on any investment opportunity in a recession. A mild recession, coupled with continued easy monetary policy and stock market correction, could actually be benign for M&A as they lower valuation expectations while not curtailing the demand for capital in any material way. On the other hand, in a deep and painful recession, the compensating distressed M&A opportunities are unlikely to make up for the loss of growth capital demand, which has driven most of Asia's M&A in recent years.
As we bring you this edition of our M&A Bulletin, we present to you our analysis on the happenings and our thoughts from our practical experience in the marketplace. We have included a special feature article on sovereign wealth funds, which have gained increased attention internationally, and another on Vietnam, the fastest growing M&A star in Asia-Pacific.
PricewaterhouseCoopers M&A Professionals
The Asia-Pacific region is characterised by a diversity of cultures, business practices and regulatory environments. Executing successful transactions in this market requires a combination of in-depth local knowledge and an integrated regional network. PricewaterhouseCoopers has experienced professionals in all major territories in the region within our Transaction Services, Tax Services (China M&A Tax and Hong Kong M&A Tax) and Corporate Finance practices to provide a wide range of integrated, uniform and high quality services to any potential investor in the Asia-Pacific region.
Get Your Copy
Read more by downloading our Asia-Pacific M&A Bulletin (Year-End 2007) (pdf, 2.1MB) for your reference. Alternatively, you may launch and view the pdf excerpts for each section or jurisdiction below:
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Special Features
North Asia
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South Asia
Australasia
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