Leverage 14 years of Australian to eclipse M & A records, infrastructure and resource transactions


Hong Kong — Australia’s M & A activity despite prolonged pandemic blockade in the most populous state, as cash-rich businesses and funds scoop up assets and show no signs of slowing bankers It will be the best year ever. ..

According to Refinitiv data, transactions involving Australian companies totaled $ 329.2 billion in the first nine months of 2021, nearly six times year-over-year, outpacing the same period in the last three years. .. Prior to 2007, the annual record was $ 139 billion.

Trading volumes were driven by a number of mega deals targeting listed infrastructure and resource companies.

This includes the $ 86 billion integration of the dual-listed company structure proposed by BHP Group and the $ 14 billion sale of the oil business to Woodside Petroleum.

According to bankers, Australia’s infrastructure assets were particularly attractive to old-age and pension funds, which are eager to develop low-cost capital for stable, long-term profits.

Nick Sims, Co-Head of Goldman Sachs’ Australian Investment Banking Division, said:

Goldman led the league table for M & A transactions announced in the Asia Pacific region, followed by Morgan Stanley and UBS.

“Infrastructure investors are investing in long-term timeframes because interest rates remain low for the foreseeable future, and if they rise, they slow down,” Sims added.

Since the outbreak of COVID-19, the deal has been closed while many states in the country have entered and exited strict blockades.

Alex Cartel, Head of Citigroup’s Australian Investment Banking Division, said:

“You have many companies with access to the capital markets, private equity funds and sovereign wealth funds, which had a strategic ambition to get started.”

“Pent-up demand”

According to Refinitiv data, transactions with Australian companies were $ 200 billion, accounting for 20% of the total value of the region, compared to just 4% last year.

Tom Basha, co-head of M & A in the Asia Pacific region of Bank of America, said Australia represents a “true change” in overall relative contribution to volume in the Asia Pacific region.

“There are many factors that bring everything together, including the stagnation of demand since last year. The level of cross-border inbound activity is also noteworthy. There are no signs of slowdown in activity. . “

US settlement company Square Inc. Acquired local fintech company Afterpay for $ 29 billion and made its largest foray into Australia this year in August.

Transactions across the Asia-Pacific region reached a record high of $ 1.25 trillion from January to September, up 46% year-on-year, and transactions backed by Southeast Asia and private equity also reached record highs, according to Refinitiv data. ..

UBS’s head of Asia M & A, Samsung Law, plans to sell assets owned by private equity firms, while the merger of special purpose acquisition companies (SPACs) with their targets is another volume. He said he was likely to be a driver.

Reuters

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