* Record $378 billion of announced M&A amid global deal boom
* China's Internet giants spurring deal frenzy
* Goldman Sachs ranked top for M&A fees and equity deals
By Lawrence White
HONG KONG, June 30 Asia-Pacific takeover volumes
hit a record in the first half of 2014, driven by a surge in
dealmaking in Australia and bankers expect the buying spree from
China's private tech companies and reform of the state sector to
boost second-half activity.
Announced M&A volume in the Asia-Pacific region in the first
half rose 67 percent from a year ago to $378 billion,
preliminary data from Thomson Reuters data show, the highest
volume on record for the equivalent period. The record comes
amid a boom in global M&A as improving CEO confidence and strong
cash positions held by corporations drove a spate of mega-deals
in pharmaceutical industries.
"This year has seen an increase in risk appetite driving a
broader mix of real M&A deals, across India, Australia and China
and across industry sectors, which makes us very optimistic for
the rest of the year," said Richard Campbell-Breeden, chairman
of the M&A group for Asia-Pacific at Goldman Sachs Group.
Australasia saw 19 deals worth more than $1 billion,
compared with just two in the same period last year, with the
real estate, industrials, consumer and healthcare sectors
particularly active amid improving market conditions.
"The very significant rebound in deal activity in Australia
is the result of a release of pent-up-demand, the fact that
valuations have stabilized, and greater boardroom confidence,"
said Colin Banfield, head of M&A Asia Pacific at Citigroup.
Boutique investment bank Somerley Ltd snatched the top spot
for all announced Asia-Pacific mergers, almost solely on the
strength of its advisory work for the massive $36 billion
purchase of assets by China's CITIC Pacific Ltd from
its state-owned parent.
That deal forms part of the broader theme of China's
state-owned enterprises beginning to restructure amid slowing
growth at home and the government's desire for consolidation in
The high variance in fees paid for deals in Asia means there
is often little correlation between a bank's ranking on the
tables for volume of deals done and for fees earned, say M&A
bankers in the region.
Goldman Sachs Group Inc claimed the top spot for fees
earned from Asia Pacific M&A in the first half of the year,
according to estimated data from Thomson Reuters and Freeman
CHINA TECH SPREE
China's Internet giants have been on a buying spree this
year. Top deals include Alibaba Group Holding Ltd's IPO-ALIB.N
$1.2 billion investment in the merged video platform Youku Tudou
, and JD.com Inc's almost $2 billion investment
in Alibaba rival Tencent Holdings.
"The slew of deals in the China tech sector is a natural
result of the need for consolidation as the leading players seek
to aggregate content for China's Internet users," said Citi's
In addition to being Asia's top M&A fee-winner, Goldman
Sachs also tops the league tables for equity capital markets,
ahead of UBS and Citi. But stock volatility took a
toll on ECM volumes, with Asia-Pacific tally falling marginally
to $87.5 billion in the first half, from $89.3 billion from a
Asia will miss out, however, on the year's likely plum
equity deal as Alibaba abandoned plans to list in Hong Kong in
favour of a U.S. IPO later this year.
"It was a disappointing outcome for Hong Kong because
Alibaba's listing there would have had a gravity effect, pulling
more companies to the market," said Fan Bao, chairman and chief
executive officer of boutique investment bank China Renaissance.
(Additional reporting by Denny Thomas; Editing by Matt