Mergers and acquisitions (M&As) in Taiwan this year might gain further momentum after posting a 53 percent increase last year, as local companies seek to bolster core units and expand into markets at home and abroad, a report released yesterday by PricewaterhouseCoopers (PwC) Taiwan said.
The pace of last year’s growth represented the best showing since 2017, but lagged behind the pace of M&As worldwide, which saw a 67 percent uptick to 53,484 deals, the consulting firm said.
M&A transactions in Taiwan are diverse — covering financial, electric vehicle, semiconductor and biotechnology themes — and six transactions exceeded US$1 billion, PwC Taiwan said.
“The figures suggested that Taiwan’s M&A market has recovered from the COVID-19 pandemic, as local companies seek to strengthen their core businesses, enter target industries and raise their international profile by using external growth to secure a competitive edge,” it said.
The COVID-19 pandemic forced some players out of business and shored up others, a shake-up that has benefited the M&A market, it added.
Companies with a competitive edge in digital technology and those with innovative business models have seized opportunities, accelerating mergers or acquisitions to add to their capacity or enlarge their business scale, it said.
Despite the uncertainty linked to inflationary pressure and monetary tightening, 67 percent of Taiwanese companies surveyed said that they are more upbeat about M&As this year, it said, adding that firms believe their valuations would increase.
Most local companies plan to focus on domestic M&As, followed by expansion into Southeast Asian countries and the Americas, while focusing less on M&As in the Chinese market, the consulting firm added.
The report attributed the decline in M&A interest in China to US-China trade tensions, rising labor costs and recurrent lockdowns to curb COVID-19.
By contrast, Southeast Asian markets have shown rapid GDP expansion and possess demographic advantages, it said.
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