Mergers and acquisitions (M&As) can be a way for companies to enter new markets or strengthen themselves in one fell swoop.
The process behind it is pretty complicated though, and the integration of people, culture, and technology between two companies can be a tough one. It’s like a marriage in real life. But once the transfer is done and the whole processes run on the same systems, both companies can save lots of money.
As a bigger, expanded regional entity, they can now approach new types of investors and have more opportunities in raising larger rounds of funding. They can also play in a bigger league, challenging giants in ways they never could before.
What about the future of the merged or acquired companies?
In mergers, there should be less to worry about, as both companies form a new and bigger entity and work under it. Acquisitions can be hard to swallow for the smaller acquired companies, since they realize that they cannot compete in the market, so teaming up with a bigger fish gives them some hope for survival. The money offered also makes selling the company an attractive option for founders, even if they have to lose some control. Some founders choose to walk out and start up all over again.
We extracted data from Tech in Asia database, and discovered that a total of 535 merger and acquisition deals have been made since 2011 in Asia, out of which there were 510 acquisitions and 25 mergers.
India has seen the most M&A deals so far, with a massive 219 deals made. In 2015, there was significant growth in the number of deals closed, a 150 percent jump from that of the previous year’s. An all-time high of US$ 7.8 billion was spent on M&As in 2015 alone.
A similar trend could be found in Southeast Asia. Recently, Singapore-based venture capital Golden Gate Ventures predicted that the future exits in Southeast Asia would be M&As instead of IPOs. In light of current trends, this might just be true. Similar to the trends in Asia, companies in Southeast Asia also closed a record number of deals in 2015.
Here’s an overview of the M&As in Asia.
Infographic by Tech in Asia’s Andre Gunawan. Hana Nguyen, Rose Dao and Nadine Freischlad also contributed to this report.
Editing by Sim Yanting
(And yes, we’re serious about ethics and transparency. More information here.)
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