COVID-19: Major merger and acquisition deals on hold due to market volatility

 KUALA LUMPUR, Sept 8 -- Major merger and acquisition deals this year have been put on hold as a result of market volatility amid the COVID-19 crisis, with a decline of 25 per cent in the first half.

According to a statement, global market research company, Euromonitor International is investigating the future of global and regional M&A activities and the expected level of attractiveness using its latest M&A Investment Index.

Between 2015 and 2019, China and the United States (US) led the way as the two most dynamic M&A markets accounting for 38 per cent of global transactions.

However, with the political landscape affecting the global economy, countries are diversifying their supply and value chain strategies away from China to Southeast Asia.

The region’s low borrowing costs and depressed asset values will present acquisition opportunities for businesses from the US and Western Europe.

China, on the other hand, will shift its manufacturing capabilities to focus on its domestic market, especially in engineering and industrial machinery. Its M&A activity index is expected to grow by only 5.4 per cent, the lowest in the last five years.

In addition, the US will aim to counter China’s past influence in the Western Hemisphere by focusing on Latin America, with industries such as renewable energy, e-commerce and education leading the way.

-- BERNAMA