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Wednesday, October 27, 2021

Australia to adopt 14-year M&A record, driven by infrastructure, asset deals

HONG KONG – Despite widespread epidemic-induced lockdowns in Australia’s most populous states, bankers are showing no signs of slowing down as they prepare for a better year in merger and acquisition (M&A) operations, raising cash-rich corporate and funding assets.

Refinitive data shows that deals involving Australian companies amounted to 329.2 billion in the first nine months of 2021, almost six times a year and higher than the same period of the previous three years. The previous annual record was $ 139 billion in 2007.

The volumes were driven by a number of mega contracts targeting listed infrastructures and resource firms.

These included the 86 86 billion proposed by the BHP Group, the structure of its dual-listed company and the ্রয় 1 billion sale of its petroleum business in Woodside Petroleum.

Infrastructural resources in Australia were particularly attractive to employees and pension funds, which are keen to raise their low-cost capital for stable, long-term gains, bankers said.

“Investors in semi-regulated infrastructure assets have high confidence in the cash flow of the assets they are buying in the future,” said Nick-Sims of Goldman Sachs ’Australia Investment Banking.

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

Sims added, “Rates will be lower for the near future, if they increase, it will be slower, so infrastructure investors are investing in the long term.”

Since the launch of Covid-1, many states in the country have been hit by deals in and out of severe lockdowns.

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Alex Cartel, head of Citigroup’s Australia Investment Bank, said: “Lockdown and uncertainty over demand have really led corporate leaders to make strategic resets.”

“You had a number of corporate, private equity funds, sovereign asset funds that had access to the capital market, which had strategic ambitions. Let’s go.”

‘Paint-up Demand’

According to Refinitive, Australian companies accounted for 200 200 billion in transactions, up from just 4 per cent in the same period last year, which is 20 per cent of the total value in the region.

Tom Barsha, co-head of Bank of America at M&A in Asia Pacific, said Australia represented “a real change” in the overall relative contribution to Asia-Pacific volume.

“A lot of factors are coming together, including some paint-up demand from last year. The level of internal activity at the border is also significant. I don’t see any signs of slowing down. ”

U.S. payments firm Square Inc. made the biggest expedition of the year to Australia in August with its 29 229 billion acquisition of fintech firm AfterPay.

Overall the Asia-Pacific deal reached a record 25 1.25 trillion from January to September, growing 46 percent annually, and Southeast Asia and private equity-backed transactions also reached new heights.

Samson Low, head of UBS’s Asia M&A, said more assets owned by private equity firms are ready for sale, while consolidation between special-purpose acquisition companies (SPACs) and their targets will likely be another volume driver.

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This News Originally From – The Epoch Times

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