Asia-Pacific Deal Activity Down By 42.2% YoY in February 2023: Report

The Asia-Pacific (APAC) region is a critical market for global deal-making, with significant investments and mergers taking place across various industries. However, the deal activity in the APAC region has seen a significant decline of 42.2 per cent year-over-year (YoY) in February 2023, according to a report by leading data and analytics company GlobalData.

The deal volume in the APAC region has nosedived from 1,392 deals announced in February 2022 to 805 deals announced in February 2023. The deals comprise mergers & acquisitions, private equity, and venture financing deals.

China, which is the top APAC market for venture capital (VC) funding deal activity, witnessed a decline of 28.2 per cent YoY in deal volume in February 2023. Meanwhile, India, the second biggest market for VC funding in the region, recorded a significant decline of over 50.8 per cent in deal volume.

Aurojyoti Bose, lead analyst at GlobalData, said, “The impact of strict COVID-19 policies and tightening regulations on technology companies had an adverse impact on the deal-making sentiments in China. Meanwhile, the prevailing volatile market conditions and macroeconomic challenges seemed to have taken a toll on other key APAC markets.”

The deal activity declined YoY in the other top markets of the region such as Japan (50 per cent), Australia (45.9 per cent), South Korea (56.1 per cent), Singapore (35.1 per cent), Hong Kong (61.8 per cent), Indonesia (58.3 per cent) and New Zealand (35.3 per cent) in February 2023.

All the deal types under coverage witnessed decline. The number of venture financing deals and private equity deals declined by 41.7 per cent and 38.6 per cent, respectively, in February 2023 while mergers & acquisitions deal volume fell by 43.2 per cent.

Bose said, “The sharp decline in deal activity across the top markets across the APAC region highlights the cautious approach adopted by investors and companies amidst the uncertain economic and geopolitical landscape. The APAC region’s deal-making activity remains sluggish and reflects the need for a cautious and measured approach by all stakeholders in the months ahead.”

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