Asia-Pacific Cross-Border M&A Booms as Japan Drives Growth

Cross-border M&A in the Asia-Pacific region has seen significant growth this year, particularly in Japan, as companies seek new opportunities while adapting to higher interest rates. The total value of these cross-border deals rose 25% year-on-year to $286 billion as of Sept. 30, according to data from LSEG, with around 80% involving entities outside the region.

“There has been a notable pick-up in cross-border transactions as political stability returned to some markets, alongside pent-up demand for investments and M&A activities,” said Andre Gan, M&A partner at Wong & Partners, a member firm of Baker McKenzie in Kuala Lumpur.

Asia-Pacific M&A Overview

Despite the surge in cross-border transactions, overall M&A activity in Asia totaled $622 billion in the first nine months of 2024, a marginal 0.2% decrease from the same period in 2023. The resurgence in cross-border deals has been driven by several mega-deals, reflecting pent-up demand and a more favorable market environment.

Among the prominent deals is the Canadian company Alimentation Couche-Tard’s $38.5 billion takeover bid for Japanese convenience store chain Seven & I Holdings—the largest global M&A deal announced this year. Additionally, Australian firm REA Group, controlled by Rupert Murdoch, aggressively pursued British real estate portal Rightmove, with an increased offer of $8.3 billion after previous proposals were rejected.

Japan Leads Regional Growth

Japan has emerged as a key player in driving the region’s multibillion-dollar deals. The country’s relaxed corporate governance rules have encouraged public companies to be more open to acquisitions, and some Japanese companies are actively seeking to expand internationally. LSEG data indicates that inbound M&A in Japan surged over 16 times to a record $74 billion, while outbound deals increased by 49% to $50 billion this year.

Global real estate investor Hines, based in Texas, is actively exploring opportunities in Asia. With $93 billion in assets as of June 30, Hines has already acquired properties in Japan and Singapore and is exploring further opportunities in Australia, according to Asia CIO Ng Chiang Ling.

Southeast Asia and China Outlook

M&A activity is also rising in Southeast Asia. In July, German insurer Allianz announced plans to buy a majority stake in Singapore’s Income Insurance for approximately $1.6 billion to strengthen its footprint in Asia.

"Looking forward, 50% of the APAC pipeline is made up of global cross-border transactions,” said Rohit Satsangi, Deutsche Bank’s co-head of M&A for Asia-Pacific. He expects renewed outbound activity from Chinese state-owned enterprises focused on acquiring renewable energy and natural resource assets globally.

While China's outbound M&A transactions are down 8% year-on-year at $14 billion—the second-lowest in the past decade—a rebound is anticipated. Wong & Partners' Gan predicts that M&A activity in the region will improve, driven by easing U.S. interest rates and the conclusion of the 2024 U.S. elections, contributing to market stability through 2025 and 2026.