Taiwan M&A Market to Bounce Back in 2018, IPOs to Peak in 2019; New Global Research
- Domestic and inbound M&A set to grow again this year after a drop in 2017
- IPO activity to grow substantially in 2018
- Overall global growth assisting deal making
- Research launched at Baker McKenzie's largest event in Asia Pacific, this year held in Taipei
Taipei, 6 March 2018 - After a challenging 2017, the value of both M&A and IPO transactions in Taiwan is forecast to climb over the next two years, before easing back in 2020, according to the first edition of the Taiwan Transactions Forecast, issued by Baker McKenzie Taipei.
The forecast was released today at a press event at Baker McKenzie's annual Asia Pacific Meeting, the largest event on the global law firm's Asia Pacific calendar. The Meeting is being held in Taipei for the first time since 2007, bringing more than 350 partners together for a week of client activity, internal meetings and events.
According to Oxford Economics: "M&A activity halved in Taiwan in 2017 versus the previous year, but this largely reflects the particular strength of cross-border activity in 2016, when the merger of Inotera Memories and Micron Semiconductor Taiwan boosted deal value by close to $4bn. More fundamentally dealmaking conditions remain solid, with stable economic growth, low inflation, and low financing costs. We forecast a pickup in deal values in the coming couple of years, in line with the global and regional cycles, before a cooling from 2020."
The report, part of the Global Transactions Forecast series developed in association with Oxford Economics, predicts the global deal cycle to peak next year (2018), while Taiwan and the wider Asia Pacific region are set to peak a year later (2019).
"After a few soft patches in 2017 we have a more optimistic outlook for the global economy and dealmaking in 2018, as long as the brakes are not put any further on global free trade. We see an uplift in both M&A and IPO activity as dealmakers and investors gain greater confidence in the business prospects of acquisition targets and newly-listed businesses," said Paul Rawlinson, Baker McKenzie's Global Chair, who is in Taipei for Baker McKenzie's Asia Pacific Meeting. "However it's not a done deal, with the threat of a Hard Brexit and a NAFTA collapse both still very real. Business will need to continue to make the case for liberal trade and investment frameworks."
The research, covering 38 of the world's largest economies, predicts the value of IPO activity in Taiwan is to ultimately rise to US$1.37 billion by 2019, easing thereafter. Domestic and inbound M&A activity are also forecast for upticks, supported by good global growth, reaching a value of USD 8.7 billion in 2019.
Commenting on the research, Michael Wong, Head of M&A, Baker McKenzie Taipei, said: "In the case of Taipei, while the findings of this edition of the Global Transaction Forecast appear to be quite optimistic, there are a few key factors that should provide comfort for those Taiwanese corporates looking for better news after a difficult year. Trade as a percentage of GDP in Taiwan is double the global average, so we are already a well connected part of the global economy, and there are excellent growth opportunities available for companies who are willing to seriously venture out across the Asia Pacific region."
Overall, Asia Pacific M&A activity is forecast to peak at USD 754 billion and domestic IPOs at USD 82 billion in 2019.
About Global Transactions Forecast
Oxford Economics have used statistical techniques to estimate the historic relationship between M&A and IPO activity and key drivers, such as GDP growth, equity prices, trade flows, money supply, legal structure and property rights and freedom to trade.
Based on their forecasts for GDP growth along with anticipated changes to the other criteria in each of the 40 markets has allowed OE to project the future value of M&A and IPO transactions. These predictions have also benefitted from Baker McKenzie partners around the world giving their views on the latest trends in their market and the likely evolution of transactions in their country.
In estimating global transactional activity, the forecast uses data on completed deals rather than announced deal values. From an analytical modeling perspective, it makes more sense to use completed deals for forecasting as it reflects actual outcomes. When calculating estimations, Oxford Economics grouped countries according to standard IMF classifications.
About Baker McKenzie
Baker McKenzie helps clients overcome the challenges of competing in the global economy. We solve complex legal problems across borders and practice areas. Our unique culture, developed over 65 years, enables our 13,000 people to understand local markets and navigate multiple jurisdictions, working together as trusted colleagues and friends to instil confidence in our clients.
About Oxford Economics
Oxford Economics was founded in 1981 as a commercial venture with Oxford University’s business college to provide economic forecasting and modelling to UK companies and financial institutions expanding abroad. Since then, we have become one of the world’s foremost independent global advisory firms, providing reports, forecasts and analytical tools on 200 countries, 100 industrial sectors and over 3,000 cities. Our best-of-class global economic and industry models and analytical tools give us an unparalleled ability to forecast external market trends and assess their economic, social and business impact.
Headquartered in Oxford, England, with regional centres in London, New York, and Singapore, Oxford Economics has offices across the globe in Belfast, Chicago, Dubai, Miami, Milan, Paris, Philadelphia, San Francisco, and Washington DC. We employ over 130 full-time people, including more than 120 professional economists, industry experts and business editors—one of the largest teams of macroeconomists and thought leadership specialists.
For more information, please contact: