M & A drivers – the Asia-Pacific view
PROFIT | M & A STRATEGY
M & A drivers – the Asia-Pacific view
Rochel Hoffman , M & A Partner , Deloitte Australia outlines the drivers of M & A across APAC
In the APAC region , we ' re seeing a few consistent drivers of M & A . Most notably , CEOs are continuing to pursue intentional growth – that is , setting and executing their own agendas for inorganic growth , rather than being forced into doing deals in response to market conditions . Business transformation , including digital transformation and the energy transition , are also dominant drivers , along with the influence of ESG itself . And private equity continues to have significant levels of dry powder , both globally and within AP , combined with a strong appetite to deploy that capital into the market .
In relation to the energy transition , we ’ re seeing oil and gas and energy-intensive
industries particularly looking to shift their portfolios and processes towards clean energy growth areas such as carbon capture , hydrogen , renewables , and other clean technologies .
We ’ ve recently seen a sharp rise in the number of clients across AP and we ’ re helping them scan the market , transact , access green capital , or set up deep ecosystems to leverage green energy and technologies . Examples include BHPs recent attempt to take over OZ Minerals6 as they look to secure assets for a shift into clean energy and electric vehicles ( EVs ).
Our 2022 Heads of M & A survey in Australia and New Zealand found that almost 50 % of respondents have or are planning to re-evaluate their portfolios to acquire or divest through the lens of ESG .
Regional variation in ESG expectations and strategies Geography also plays a hand , with regional variation in ESG expectations and strategies . Europe , for example , had barely begun to recover from the pandemic before the war in Ukraine added extra levels of shock and risk to navigate . From severe disruptions to food supply chains to economic sanctions impacting soaring energy prices , businesses are facing unexpected shocks and see M & A as a potential safety net .
Christof Huth , partner at global consultants Roland Berger , says companies in Europe are looking to strengthen their core business to become less susceptible to these kinds of shocks . “ Times like these show how resilient the business model really is and companies may need to reshape themselves – one important tool to become more resilient to crisis is M & A activity .”
Fellow partner at Roland Berger , Sven Kleindienst , says ESG will be just as important as traditional motives , such as geographical or product expansion , digitalisation and cycle resilience , in the next five years . He says the European market is a clear frontrunner in this drive towards ESG .
“ ESG is already playing a large role in companies ' target selection processes and due diligence and it is expected to further
38 November 2022