Recession fears, trade tension likely to result in fewer deals happening in Asia

Due to global recession and trade uncertainties, Asia Pacific might register slowing in deal-making momentum till the year 2020. As per analysts, mergers and acquisitions in Asia Pacific might showcase a fall of 18% during the present year. Moreover, it was reported that in the next year the region might register further decline of about $529 billion, which includes cross border and domestic M&A deals.

Through the email Ai Ai Wong stated that the region might register mixed trade headwinds and economic outlook which would affect M&A activities. Moreover, it is recommended that corporations and individual investors should remain cautious during 2020 in Asia. During present year dealings in Asia have registered a slow down because of few outbound deals in China.

The trade war between China and US had escalated during recent months since both the countries have started to impose large amount of money as tariff on their respective products. As per one market research company China is considered as fourth-highest M&A outbound source by volume. The acquisition of American companies by China fell near by 95%, back in 2016 it was around $55.3 billion which came around $3 billion last year.

As per one of the consultancy firms large number of cross-border dealing which characterize M&A market since last 5 years weren’t able to seal because of trade dispute. Foreign governments are thoroughly scrutinizing investments which are coming from China. One of the reasons for such step is concern related to national security due to trade war.

Though in Asia M&A activities have registered a fall, Japan can be considered as an exception, and this is so because most of the companies in the Country are expanding due to acquisition of foreign firms. The Japanese policymakers are encouraging indigenous companies so that they can acquire abroad as well as find new opportunities to advertise Japanese goods.

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