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Smaller deals prop H1 M&A activity in Asia

Elaine Tan
Elaine Tan
Senior Analyst, Deals Intelligence

A consumer-spending slowdown and concerns about the Chinese property market are among the worrying signals that have dented deal-making in the Asia-Pacific region in the first half of 2023, slashing a fifth from investment banking fee income. However, unlike other ‘risk-off’ periods, there has been a notable increase in the number of transactions and issuances, as well as a strong showing from several smaller countries in the region.


  1. Southeast Asian M&A grows 6% amid regional declines.
  2. China takes more than half the global IPO market.
  3. Region’s bond markets cool slightly to raise $1.9trn.

The total value of Asia-Pacific involvement announced M&A transactions in the first half of 2023 has fallen 38% to a decade-low of $340bn, with JP Morgan leading the top M&A adviser.

During the same period, completed M&A fees in the region fell 46% year-on-year to $1.1bn.

The biggest declines were in the region’s largest markets – China and India – which now account for less than half of all targets emerging market M&A. Indian involvement M&A plummeted 75% in the first half of the year, to hit a seven-year-low of $33bn. Overall China M&A activity dropped 27% from a year ago, making it the lowest first half period by value in a decade.

However, reflecting a wider trend towards smaller situations, the number of announced deals in India grew by 5% and witnessed the busiest-ever semi-annual period by deal count. While M&A activity may not have been driven by mega deals this year, a healthier level of mid-market transactions dominated the market.

Similarly, smaller markets, such as Thailand and Vietnam, saw rising activity levels, pushing Southeast Asia into 4% higher year-on-year – one of the few regions in the world to see positive territory so far this year.

The $27bn reverse US listing of Vietnamese e-SUV maker, VinFast Auto, by a Hong Kong based SPAC, encapsulates several unlikely trends in today’s M&A market. It is the biggest Vietnamese M&A transaction since records began in 1980. The deal also helped push the Industrials sector involving Asia M&A to the top of the sector statistics, totaling $72bn for 21% of the market.

At least 25 SPAC combinations were announced in the region in the first half of the year, with an aggregate value of $34bn, representing a 145% increase year-on-year. The number of SPAC deals increased 56% over the same period.

By contrast, private equity investors retreated from the region’s M&A market during the first half of 2023, investing just $42bn in transactions, a fall of 41% from the same period last year.

Elsewhere, Australian dealmakers face a unique situation of depressed home-grown activity and rapidly rising foreign acquisitions. A 55% decline in domestic activity and a 70% fall in outbound deals drove the overall 23% decline in M&A so far this year, to touch $61bn. By contrast, inbound M&A soared 112% to $34bn, the highest first half total since records began.

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Equity’s many issues

Asia-Pacific equity capital markets (ex-Japan), saw a 17% fall in the first half of 2023, to $112bn, although the number of issuances actually increased 11%.

Initial public offerings are 28% lower than the same period last year, raising just $37bn, the majority of which were driven by Chinese stock market listings, capturing 55% of the global IPO market.

In contrast to the general downward trend, several smaller markets have enjoyed a resurgence so far in 2023.

The year has begun well for equity issuance in Japan, with $17bn raised in the first six-months, a four-fold increase and a five-year high. Meanwhile, Australian equity capital markets have raised $7.7bn, a 20% increase year-on-year (although its IPO market is down 92%, with just eight flotations raising a total of US$38m). India also enjoyed growth in equity issuance: up 14% to $10bn. Southeast Asia ECM proceeds grew 34% from a year ago, driven by growth in Singapore and Indonesia equity proceeds which saw 213% and 74% increase compared to first half of last year.

A trend towards more, smaller transactions was present also in the market for follow-ons, where the number of issuances increased 15% while the aggregate dollar value fell 3% to $63bn.

So far, Asia-Pacific’s five largest equity raising have all been follow-ons, and all from China or Hong Kong. Meanwhile, high technology was the largest sector, raising $25bn, an 8% increase on a year before, followed by Industrials and Materials.

For the region as a whole, ECM fees totaled $3.3bn, the lowest first half since 2020.

CITIC took first place for Asia Pacific ex Japan’s equity, and equity-linked underwritings with an 11% market share.

Bond boom slows

Asia-Pacific domiciled primary bond offerings raised $1.9trn in the first six months of the year, the second largest H1 total since records began in 1980, despite falling 13% from last year’s high watermark. The decline was largely precipitated by a slowdown in government and agency issuance, which represented 45% of the region’s bond offerings.

China raised $1.5trn in bond proceeds, representing 79% of the regional market, a fall of 16 percent from a year ago.

Meanwhile, South Korean issuance jumped 14% to $128bn, while Indian primary bond issuance grew 66% to $51bn, the highest semi-annual period since records began in 1980. Australia-domiciled issuers raised $90bn, down 7% following a record first half in 2022, but still high on a historic basis.

Meanwhile, the Asian local currency bond market was dragged down by a 15% fall in Chinese Yuan issuance, bringing bond proceeds to $1.7trn in the first half of 2023, down 13% compared to a year ago and the slowest opening period for issuance in two years.

Japanese Yen-denominated bonds bucked the trend and saw a 12% increase year-on-year to JPY11trn.

In Asia-Pacific (ex-Japan), DCM fees fell 16% to $6.8bn.

For overall investment banking fees, across equity, debt and M&A, CITIC took top position, earning $892bn, representing 7% of the Asia-Pacific (ex-Japan) fee pool in H1 2023.

Analyse market trends and assess the changing competitive landscape with our Deals Intelligence offering, featuring league tables and reports powered by our leading-edge products for the deal making community.

Want to find out more? Watch our on-demand webinar for a deep dive into Deal making activity in Asia Pacific featuring our expert Deals Intelligence speakers and IFR Asia, for a full review of the M&A and Capital Markets landscape and a forward-looking view into H2 2023 in Asia Pacific.


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Southeast Asian M&A grows 6% amid regional declines.