Mergers and acquisitions in the Philippines surged by 398.2 percent to $2 billion in the first half from a year ago, boosted by the consolidation among cement players, according to the Global & Regional M&A Report.
Mergermarket which released the report said the Philippines was the fastest-growing market in the Asia-Pacific region excluding Japan in terms of M&As deals in the six-month period despite a lower deal count.
“The surge in the Philippines was largely driven by the flagship ‘Build, Build, Build’ campaign of President Rodrigo Duterte which is spurring consolidation among cement players,” Mergermarket said.
The largest deal in the country during the period was San Miguel Corp.’s acquisition of an 85.7-percent stake in Holcim Philippines from Switzerland-based cement giant LafargeHolcim for $1.85 billion.
San Miguel reported in May that its unit First Stronghold Cement Industries would acquire 5.53 billion common shares in HPI held by Holderfin B.V., Union Cement Holdings Corp. and Cemco Holdings Inc. which are major shareholders of LafargeHolcim.
The deal is currently under review by the country’s anti-trust body, Philippine Competition Commission.
Mergermarket reported that M&A activities in the region slowed down in the first half to levels unseen since 2013 amid an escalating US-China trade and technology war.
The region generated 1,525 deals valued at $241 billion in the first half, resulting in the shrinking of its
global market share to 13.4 percent from 18.6 percent a year earlier.
Aside from the Philippines, other countries in Southeast Asia that posted year-on-year increase in M&A deals in the first half were Singapore which posted $17.1 billion worth of transactions, up 154 percent from last year’s level; Indonesia with $6.6 billion deals, an 88.6-percent hike from a year ago; and Malaysia with $3.7 billion worth of deals, a 16.4-percent increase from the previous year’s level.
Thailand was a sore spot in the Southeast Asian region, as dealmaking activity declined 64.7 percent year-on-year to $3.1 billion due to growing “political uncertainty caused by the ongoing power struggle between pro-military allies and opposition parties”.