Both U.S. and Asian buyers, whose economies are in better shape than those in Europe, are looking at acquisitions outside their home region, said Hermann Prelle, chairman of mergers & acquisitions in Europe, the Middle East and Africa at UBS AG.
Cisco Systems Inc. (CSCO), with $46.7 billion in cash as of January, said this month it will finance a $5 billion purchase of U.K. video-services software company NDS Group Ltd. with funds held overseas.
In Asia, there an increasing amount of dealmaking in financial services with multinational firms “rationalizing and pulling back selectively in the region,” said Joseph Gallagher, co-head of Asia-Pacific M&A at Credit Suisse Group in Hong Kong. He also anticipates oil and gas transactions will lead Asian M&A as countries including China seek more resources to fuel expanding economies.
First-quarter Asia-Pacific deals dropped 38 percent from the previous three months to about $40 billion, data show.
“We are hopeful that the rest of the year will see increased levels of activity,” said Samuel Kim, head of M&A for Asia-Pacific at Morgan Stanley. “We’re seeing a lot of clients think actively about M&A.”
More Asian companies are also pursuing corporate takeovers, rather than focusing just on buying assets or forming joint ventures, Kim said. Youku Inc. (YOKU), owner of China’s most popular video website, agreed to buy smaller competitor Tudou Holdings Ltd. in a $1 billion stock deal this month in one example of this trend.
Morgan Stanley is the top adviser for Asia so far this year, data compiled by Bloomberg show. Globally, JPMorgan is the top financial adviser among investment banks so far this year, followed by Citigroup and Goldman Sachs.
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