The Asia Pacific region is home to many joint ventures fostering innovation and mutually beneficial partnerships. Here are some of the major APAC business deals in 2021 to note.
More companies in the APAC region are participating in joint ventures. The region remains dynamic after having a solid first quarter in 2021. Bankers maintain that this growth will continue for the latter half of the year. There’s been a jump in both mergers and acquisitions (M&As) as well as private equity deals. In order to reach economic stability, companies are looking to sell, buy, or combine operations.
In the first half of 2021, the APAC region, excluding Japan, saw a record-breaking US$640 billion in mergers and acquisitions alone.
Some of the hotspots worth mentioning are New Zealand, Australia, Southeast Asia, and IPO markets in North Asia. Some companies are taking advantage of US and China listings by purchasing special purpose acquisition companies (SPACs).
Below are five examples of business deals in the APAC region that illustrate this booming M&A economy.
Grab Holdings and Altimeter Growth Corp.
Grab Holdings is Southeast Asia’s largest ride-hailing company. Its recent merger with US-based Altimeter Growth Corp. will make it reach a value of US$40 million. This merger will also allow the company to trade in the Nasdaq Trade Market.
This merger is certainly worth noting, as it’s officially the largest SPAC merger recorded.
Grab Holdings received about US$4.5 million in cash proceeds, making it the most valuable Southeast Asian company in the APAC region.
The company started as just a ride-hailing service but expanded its operations into grocery and takeout delivery, digital payments, and other financial services, for example. Grab calls itself a “superapp” capable of serving a wide range of customers during a time where food delivery apps are growing in popularity.
Kuaishou Technology Co. Ltd. IPO
In addition to M&As, initial public offerings (IPOs) are becoming increasingly popular in the APAC region, so popular that they are breaking records.
One organisation that began selling shares was Kuaishou Technology. Once shares went public, they soared 200% to open at HK$338. The Hong Kong stock market has generally attracted high-profile Chinese tech listings, and this example is no exception.
Kuaishou offers a live streaming platform for its customers- and active users keep joining. Its number of users recently reached 769 million. The company brings in revenue through live streaming, ads, online marketing, online games, and e-commerce.
Gojek and Tokopedia
Similar to Grab, Gojek, another ride-hailing company based in Indonesia, merged with Tokopedia, a tech company specializing in e-commerce.
Gojek will be listing in Jakarta and the US later this year. The two companies were formed to create the GoTo Group. GoTo Group is now a tech giant that’s being compared to Amazon. The valuation of the combined companies is expected to be between US$35 and $40 billion.
Tokopedia was already using Gojek’s network of drivers to deliver packages, and with the merger, it’s likely that customers will only have more benefits and services to reap.
Axiata Group and Telenor
The recent merger between Axiata and Norway’s Telenor has resulted in the creation of a telecom giant. The two independent companies combined to create a single company for RM12 billion.
With this merger, they’ll own 43.7% of the market share, overtaking Maxis, another mobile service provider. Mobile service providers were struggling to compete in the market due to the Covid-19 pandemic and this deal only intensified competition, forcing smaller companies to find innovative ways to bring in cash.
The new company’s subscriber base reached 19 million with annual revenue of RM12.4.
Reckitt Bensicker Group and Primavera Capital Group
Reckitt made the decision to sell its baby formula business in China to private equity firm Primavera Capital Group in a US$2.2 billion deal. One reason for such a maneuver is the creation of a new business mandate.
More specifically, the deal is meant to help rejuvenate Reckitt and spark financial growth during falling birth rates and increased competition, which has contributed to the company’s economic downturn.
Primavera will take over Reckitt’s manufacturing plants located in the Dutch city of Nijmegen and Guangzhou in China. Reckitt will still own and operate the Mead Johnson and Enfa family of brands globally.
It is evident that the APAC region is recovering quite nicely from the ongoing pandemic. The global recovery is a top priority for many businesses across the world, and competitors find that joining forces is a seamless way to achieve stability.
More Deals to Come
It is likely that more M&As will spark in the APAC region based on the current trends. Despite the rippling economic effects of the Covid-19 pandemic, countries in the APAC region are optimistic for the future.