The first nine months of 2021 saw the busiest flurry of mergers and acquisitions (M&As) in Southeast Asia in more than a decade. According to experts from the Bank of America (BofA), maturing tech start-ups and telco companies are driving that growth, resulting in the January-September period hitting $149.3 billion in M&A values, triple the values of the full year 2020.
The $18 billion GoTo Group merger of Indonesian ride-hailing platform Gojek and e-commerce company Tokopedia is leading the fray, along with the planned $40 billion merger of Singapore’s Grab Holdings with Altimeter Growth, a special purpose acquisition company (SPAC).
Grab’s multi-million deal, also the biggest acquisition by an SPAC, is expected to happen next week after Altimeter Growth announced an extraordinary general meeting to be held on November 30.
James Love, head of Southeast Asia M&A at BofA, said that 2021 is a bumper year with plenty of carryover in the pipeline for 2022.
“Within the traditional telco sector we have seen some long-anticipated consolidation, as well as ongoing interest in digital infrastructure as telcos look to unlock value in their assets,” said Love.
2021 started with an M&A bang when Singapore’s Sea Ltd acquired Indonesia’s Bank BKE for an undisclosed amount via the former’s subsidiary Turbo Cash Hong Kong.
In April, EY released the Global Capital Confidence Barometer which reveals that around two in three Southeast Asian executives feel that they have outperformed their competitors in terms of operational stability during the pandemic.
These same executives are optimistic about M&A deals, with more than half of them (56%) eyeing one in 2021 or early 2022. According to EY, this is the most optimistic that executives have been since 2012, beating the 11-year average of 44%.
“Southeast Asian companies that act boldly, by embracing digital transformation and seizing M&A opportunities, will be well positioned to accelerate out of the pandemic and generate greater value over the long term,” said Vikram Chakravarty, EY Global Strategy Connected Capital Solutions Leader and EY Asean Strategy and Transactions Leader.