The deal appetite for high-quality assets globally will continue in 2023 despite fears of a coming recession, according to the co-head of Asia mergers and acquisitions at UBS Group AG.
(Bloomberg) — The deal appetite for high-quality assets globally will continue in 2023 despite fears of a coming recession, according to the co-head of Asia mergers and acquisitions at UBS Group AG.
“There has been all this demand for more M&A, particularly cross border M&A, because it’s something that we haven’t seen in the last three years,” Samson Lo said in an interview with Bloomberg TV at the UBS Greater China conference in Hong Kong. Despite the overall recession “cross border M&A will pick up significantly in the second half of this year.”
Optimism is rebounding in Asia as China abruptly called an end to the its strict pursuit of Covid Zero last year and two days ago partially reopened its borders to foreign travelers. Globally, M&A deals shrank 33% last year, with Asian dealmaking sliding 22%, according to data compiled by Bloomberg.
Lo said that a pick up in deals in the later half of 2023 in Asia would require some “other stars to align,” including a normalization of interest rates, a stabilization of mobility in China and a decline in market volatility.
The technology sector in Southeast Asia will continue to be a driving force for business, according to Lo. Many tech platforms in the region are looking for private investments and to raise funds after the SPAC boom subsided, he said. UBS is also seeing many infrastructure funds and foreign investors chasing deals related to data centers, towers, fiber networks in the area, Lo said.
In China, consumer brands could be a source of deal activity as many continued to do well amid regulatory upheaval and geopolitical uncertainty, he said.
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