Chinese dragon lures buyout activity eastwards as global M&A picks up

ASIA outstripped Europe for the first time as a centre of gravity for mergers & acquisitions in early 2010, as the value of deals struck worldwide jumped by a fifth.

Transaction values in China, Australasia and south east Asia soared 120 per cent in the first quarter, boosted by Prudential’s impending $35.5bn (£23.4bn) takeover of American International Assurance, according to Thomson Reuters.

While the value of deals planned in the region rose to $129.3bn, Europe’s share of the action sank for the third year in a row to $100bn.

The shift in global corporate activity from west to east came against a backdrop of resurgent confidence. January to March marked the strongest quarter for M&A in all countries since 2008, with deal values rising 20.5 per cent to $57.3bn.

Commentators said greater confidence in company boardrooms, improved liquidity available from banks and the rebound in equity markets were driving activity.

Frederick Green, co-head of M&A at New York law firm Weil, Gotshal & Manges said: “Senior managements don’t want to be making major capital commitments when things are turning down, but when things turn up they don’t want to be the last ones to get onto the growth trajectory.”