Corporate deals in Taiwan looks set to remain robust this year thanks to the nation’s sound economic fundamentals, and China’s relatively buoyant economic landscape and business climate, Baker McKenzie and Oxford Economics said in their Global Transactions Forecast published last week.
The report, based on macroeconomic indicators compiled by Oxford Economics and insights provided by Baker McKenzie’s partners in 42 markets, explores the attractiveness of different countries’ economic environments for merger and acquisition (M&A) and initial public offering (IPO) activity.
“In terms of attractiveness for conducting transactions, Taiwan ranks third among all economies in the Asia-Pacific region and fifth globally,” Baker McKenzie said in a statement on Thursday.
The global law firm forecast that the total value of M&A transactions in Taiwan would reach US$9 billion this year on an estimated 122 deals.
That would be less than US$12.5 billion last year, when the numbers were partially inflated by two megadeals by ASE Group (日月光集團), which were together worth US$9.4 billion, Baker McKenzie said.
Last year, Advanced Semiconductor Engineering Inc (日月光半導體), the world’s largest chip packager and tester, completed the acquisition of domestic rival Siliconware Precision Industries Co (矽品精密) to form ASE Technology Holding Co (日月光投資控股), while ASE Group’s subsidiary Universal Global Electronics Co Ltd (環海電子) acquired a 60 percent stake in a Poland-based original equipment manufacturing unit of Chung Hong Electronics (Suzhou) Co (蘇州昶虹電子).
Meanwhile, initial listings would remain a key driver of domestic capital-raising activities, with the total value of offerings estimated to reach US$400 million this year, US$550 million next year and up to US$700 million in 2021, Baker McKenzie said.
“Although global momentum for M&A and IPO activity is likely to encounter a natural cyclical cooldown, key indicators put the Taiwan economy on a stable footing,” Michael Wong (汪士邁), cohead of the corporate and M&A practice at Baker McKenzie’s Taipei office, said in the statement.
“The domestic technology sector, in particular, will continue to remain active, with a number of significant deals in the pipeline scheduled to close in 2019,” Wong said, citing Hon Hai Precision Industry Co’s (鴻海精密) announcement last year of an US$866 million acquisition of Belkin International Inc, a Califonia-based major maker of mobile devices and computer accessories.
As business has become more immune over time to global macroeconomic uncertainty and learned to live with volatility, corporate dealmaking in Japan, Australia, Vietnam and India is expected to remain resilient this year, Baker McKenzie said.
In China, consolidation in heavy industry and upgrades of manufacturing capabilities would be key structural drivers of M&A this year and beyond, it said.
However, “with growth shifting towards a new normal of around 6 percent and the [Chinese] government seeking to further reduce financial risk via slower credit growth, M&A values in China are forecast to remain noticeably lower than through 2015-2016,” Baker McKenzie said.
The law firm forecast that consumer sector-related corporate deals would see strong momentum this year due to accelerating wage growth in advanced economies, while the technology and telecoms sectors would observe several major transactions announced last year to close this year.
Deals in the pharmaceutical and healthcare sectors are predicted to show a modest acceleration after a disappointing showing last year, and consolidation in the finance sector would keep momentum relatively stable, while the basic materials sector should be more active than last year due to demand for new metals and minerals, such as those used in electric vehicles, it said.
“Even with a cooling global economy and rising protectionism, we remain confident that the environment and appetite for dealmaking remain strong among corporates, wherever they are in the world,” Baker McKenzie global transactions leader Ai Ai Wong (黃愛愛) said.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last