Companies in the city-state announced around US$91 billion of overseas deals this year through September, more than double the US$42 billion of transactions for the same period of 2017. Temasek Holdings and GIC still loom large, but increasingly others are inking their biggest-ever transactions to put Singapore on the world stage.
Many of the next-generation leadership teams in these companies are helmed by executives with multinational experience and they bring a focus on cross-border growth.
Singapore Technologies Engineering Ltd plan a US$630 million deal to buy an aircraft engine components group from General Electric Co. CapitaLand is in the process of acquiring a portfolio of multifamily properties in the US for US$835 million in what is its largest overseas transaction since 2010, while Singapore Press Holdings, owner of The Straits Times newspaper, last month purchased some student accommodation in the UK for US$230 million, its biggest foray abroad. Singapore firms were involved in 468 transactions as buyer of foreign companies this year through September, an increase of 7.8 per cent from the same period of 2017. Globally, M&A activity rose 2 per cent.
Many Chinese companies have too much leverage and are selling off assets to strengthen their balance sheet. Being familiar with the region, Singapore companies are coming in and many do cut-price offers. Firms from Singapore have been involved in 68 acquisitions of Chinese companies so far this year. The volume of transactions jumped from US$4 billion the same period of 2017 to US$20 billion. Temasek’s major transaction was its US$3.5 billion injection to help Bayer AG finance its planned takeover of US competitor Monsanto. GIC was also involved in Blackstone Group’s acquisition of a majority stake in Thomson Reuters Corp’s financial and risk unit.
With the driving force behind overseas acquisitions showing no sign of letting up, Singapore Inc. will continue its offshore push. Firms are looking to acquire new technologies, new sources of growth. The trend should continue as they become more experienced in competing for assets abroad. Since 2005 we help companies expand overseas. Please contact us for a 1 hour free consulting.