Asean sees 118 M&A deals worth $14.7 bn in Q1

This represents a year-on-year increase of 8 per cent in value and 7 per cent in volume over the same period in 2016. Rich with investment opportunities and positive demographics—a young and dynamic population with growing disposable income and upward mobility, the Association of Southeast Asian Nations (Asean) continues to attract international acquirers. 
In 2016, the region recorded 534 M&A transactions valued at $57.9 bn.
According to the research, 89 deals worth $18.9 bn in intra-regional M&As were recorded in 2016, registering a sizable year-on-year increase of 368 per cent in value and 19 per cent in volume from 2015. Whether 2017 will put on a similar performance remains to be seen as the year began on a slower note with just 18 deals worth $1.5 bn in the first quarter.
 Thailand was the top target jurisdiction for intra-Asean M&A by value from 2014 to the first quarter of this year with US$10.3bn from 38 deals, followed by Indonesia and Vietnam.
 In the first quarter of this year, Asean witnessed 46 foreign inbound deals worth $10.6 bn, a 130 per cent increase in deal value compared to same period last year, which posted 52 deals worth US$4.6 bn, in spite of a drop in volume.
Richard Dailly, Managing Director at Kroll, said the hybrid figure of the “businessman politician” is a characteristic of the business environment in Asean, which inherently creates corruption and compliance risks for investment and M&A activity. Businessmen have little incentive, when they also have political interests, to improve the regulatory environments in their home countries, when these regulations can create potential barriers to their own business activities.
On the cybersecurity risks pertinent to the Asean , Dailly identifies a lack of education among the business community towards the quick-changing and increasingly complex and sophisticated nature of cybersecurity threats.
 One of the best ways to mitigate risks in cross-border M&A is to engage in a thorough pre-transactional due diligence process. “When conducting due diligence, it is important to unravel and understand the links between a potential business partner and their connected parties, particularly if these parties might be connected politically. These connections may impact how they are able to win contracts and licenses, and may indicate how that business is able to influence other local stakeholders, ” according to Dailly,
 “Local context also needs to be factored into any due diligence. Language barriers, coupled with the existence of different political structures and opaque regulatory frameworks, often pose challenges to foreign investors, who may also be unfamiliar with how political dynamics play out between different parties in unfamiliar geographies. 
This might include needing to understand how non-state stakeholders might wield power and influence. This might also include the media, unions and non-governmental organisations, which are frequently connected to local politicians and competing tycoons.”