Wooden Blocks With Mergers And Acquisitions Text On Chess Board

REUTERS reports:

Asia’s bankers say they expect the hottest trend in global deal-making, IPOs for special-purpose acquisition vehicles (SPAC), to rocket in the region this year from small beginnings, fuelled by well-resourced investors including private equity firms.

Globally, SPACs raised $92 billion from IPOs in first-quarter 2021, according to Refinitiv data, already surpassing all of 2020. SPAC mergers – when the blank check firm uses IPO funds to merge with a target – amounted to $210 billion.

But Asia’s representation in the global pie has been small so far – about 11 out of 2021’s 304 SPAC IPOs, and just $4.7 billion in SPAC mergers. Given the region’s large pool of new-economy companies, bankers are now plugging it as a hot spot for merger targets.

Raghav Maliah, co-head of M&A for Asia ex-Japan at Goldman Sachs, said the significant increase of Asia-focused SPAC involvement has been the most notable feature in the region’s M&A this year. First-quarter Asia M&A hit a three-year high of $279.5 billion, up 37% year-on-year, Refinitiv data showed, with private equity-backed deals scoring a record $40.6 billion.

“These blank check companies (SPACs) have become a new dynamic force and potential merger partner for some of Asia’s most innovative companies,” Maliah said…

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