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Australia and China provide M&A beacon in economic gloom

2 April 2009

Mergers and acquisitions activity in Australia and out of Greater China are the bright spots in an otherwise lacklustre first quarter of regional deal activity, according to leading Asia Pacific law firm Allens Arthur Robinson (Allens).

Bloomberg figures just released confirmed M&A activity dropped by 44 per cent in the Asia Pacific region for the first quarter of 2009 compared to the same period a year ago.

However, the value of M&A transactions in Australia has increased from US$17 billion to US$25 billion on the same period last year, while outbound investment from China accounts for 70 per cent of all M&A activity in that country.

The head of Allens' Greater China M&A practice, Campbell Davidson, said it was no coincidence that both countries' M&A activity remained relatively buoyant, with strong Chinese investment into Australia and the mining sector in particular.

'A couple of years ago our Greater China offices were working with Australian companies wanting to invest in China,' said Mr Davidson. 'We now continue to be approached by Chinese clients to assist them with their acquisition plans in Australia.'

The latest Bloomberg figures show Allens topping the Asia Pacific ex-Japan announced deals table with involvement in more than US$22 billion in deals, which translates to a 32.1 per cent market share.

The firm was also involved in the top three Asia-Pacific deals in the first quarter of 2009, which were all associated with Chinalco's bid for a stake in Rio Tinto.

Allens Sydney-based Partner Guy Alexander said there was an expectation of a good flow of activity over the next quarter.

'We expect the M&A market in Australia will be concentrated on negotiated acquisitions focusing on business divisions and subsidiary operations,' Mr Alexander said.

Allens was also ranked on top for Australia & New Zealand announced deals, having been involved in 10 deals with a total value of US$19.2 billion dollars, leading to a market share of 73.7 per cent.  

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Notes for editors.

Founded in 1822, Allens Arthur Robinson offers one of the most comprehensive legal networks in Australia and Asia with more than 1500 personnel based in 14 cities and eight countries across the region. Clients voted Allens Arthur Robinson the Best Professional Services Firm (revenue over $200 million) and Best Law Firm (revenue over $100 million) in the annual BRW Client Choice Awards 2005, 2006 and 2008. We have been an EOWA Employer of Choice for Women since 2004.