Mergers and acquisitions (M&As) in the nation gained steam in the first four months of this year, driven mainly by financial and telecommunication service providers reinforcing their operations and increasing their market share, consulting firm Ernst & Young Taiwan said yesterday.
M&A deals in the first four months spiked 53 percent from the same period last year, while their transaction values grew nearly fourfold, Ernst & Young Taiwan told a forum cosponsored by the Taiwan Mergers and Acquisition and Private Equity Council (台灣併購與私募股權協會), and Jones Day law firm.
The nation’s M&A activity gained pace even though Russia’s invasion of Ukraine and the lingering effects of the COVID-19 pandemic dampened such activity in the Asia-Pacific region and around the world this year, the consultancy said.
Photo courtesy of Ernst & Young Taiwan
The number and value of global M&A deals in the first six months shrank 18 percent and 27 percent respectively from a year earlier after hitting a record last year on the back of ultra-low interest rates and excessive liquidity, it said.
The technology, media and telecom sectors continue to dominate M&A deals as corporations embrace digital transformation and new communication technologies, it said, adding that private equity played an important part in supplying the capital required for transactions.
Taiwan’s M&A market fared well last year and in the first four months of this year, because COVID-19 infections stabilized during the period, allowing overall deals to reach US$6.08 billion, Ernst & Young Taiwan said.
Foreign buyers, mainly from Asia, regained interest in investing in Taiwan, although there is still room for improvement compared with 2017 and 2018, it said.
Border controls and quarantine requirements curtailed M&A dynamics on the part of Taiwanese buyers, it said.
Rather, the trend of setting up special purpose acquisition companies spread to Taiwan where electric scooter maker Gogoro Inc (睿能創意), Internet of Things solutions provider Gorilla Technology Group (大猩猩科技), and augmented reality beauty and fashion business solutions supplier Perfect Corp (玩美移動) have sought listings in the US, it said.
Meanwhile, financial holding companies joined the M&A bandwagon in the hopes of expanding their economic scale and earnings ability, Ernst & Young Taiwan said.
That explained why China Development Financial Holding Corp (中華開發金控) bought China Life Insurance Co (中國人壽) and DBS Bank Taiwan (星展台灣) purchased Citibank Taiwan Ltd’s (花旗台灣) consumer banking business, it said.
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