Asian deal value drops 54 percent in Q1

Deals done by Hopu and Terra Firma were among the handful of transactions larger than $100m agreed in a region where deal value and volume have both declined significantly.

Roughly $4.27 billion was invested in Asian private equity deals in the first quarter of 2009, down 54 percent from $9.24 billion in the same period last year. The total number of private equity transactions fell to 68 from 164 a year ago, according to data servcie ZEPHYR.

On a quarterly basis, the total value of deals increased by 36 percent from $3.14 billion invested in the fourth quarter of 2008, though the number of deals fell from 100 in the same period.

In total, there were just seven transactions larger than $100 million in size, the study found. The largest private equity deal in the first quarter was China-focused Hopu Investment’s $2.4 billion investment for a minority stake in the Bank of China. The second largest deal was Terra Firma Capital Partners’ $276 million investment in Consolidated Pastoral Company for a 90 percent stake.

The value of all M&A activity in Asia in the first three months of 2009 stood at $160 billion, reflecting a decline of 28 percent year on year. A total of 3,952 M&A deals were recorded in the same period, a fall of 24 percent compared to a year ago.

The region’s most active M&A market in terms of the number of deals was Japan with 904 transactions, followed by Australia and Korea with 636 and 620 deals respectively. In terms of deal value however, Australia led the way, with transactions worth $35 billion, followed by Japan which saw deals worth $33 billion.