Taiwan M&A Market To Bounce Back In 2018, IPOs To Peak In 2019; New Global Research.

Legal News & Analysis - Asia Pacific - Taiwan - Corporate/M&A

8 March, 2018


  • Domestic and inbound M&A set to grow again this year after a drop in 2017
  • IPO activity to grow substantially in 2018
  • Overall global growth assisting deal making
  • Research launched at Baker McKenzie's largest event in Asia Pacific, this year held in Taipei

After a challenging 2017, the value of both M&A and IPO transactions in Taiwan is forecast to climb over the next two years, before easing back in 2020, according to the first edition of the Taiwan Transactions Forecast, issued by Baker McKenzie Taipei.
The forecast was released at a press event at Baker McKenzie's annual Asia Pacific Meeting, the largest event on the global law firm's Asia Pacific calendar. The Meeting is being held in Taipei for the first time since 2007, bringing more than 350 partners together for a week of client activity, internal meetings and events.
According to Oxford Economics: "M&A activity halved in Taiwan in 2017 versus the previous year, but this largely reflects the particular strength of cross-border activity in 2016, when the merger of Inotera Memories and Micron Semiconductor Taiwan boosted deal value by close to $4bn. More fundamentally dealmaking conditions remain solid, with stable economic growth, low inflation, and low financing costs. We forecast a pickup in deal values in the coming couple of years, in line with the global and regional cycles, before a cooling from 2020."
The report, part of the Global Transactions Forecast series developed in association with Oxford Economics, predicts the global deal cycle to peak next year (2018), while Taiwan and the wider Asia Pacific region are set to peak a year later (2019). 
"After a few soft patches in 2017 we have a more optimistic outlook for the global economy and dealmaking in 2018, as long as the brakes are not put any further on global free trade. We see an uplift in both M&A and IPO activity as dealmakers and investors gain greater confidence in the business prospects of acquisition targets and newly-listed businesses," said Paul Rawlinson, Baker McKenzie's Global Chair, who is in Taipei for Baker McKenzie's Asia Pacific Meeting. "However it's not a done deal, with the threat of a Hard Brexit and a NAFTA collapse both still very real. Business will need to continue to make the case for liberal trade and investment frameworks."
The research, covering 38 of the world's largest economies, predicts the value of IPO activity in Taiwan is to ultimately rise to US$1.37 billion by 2019, easing thereafter. Domestic and inbound M&A activity are also forecast for upticks, supported by good global growth, reaching a value of US$8.7 billion in 2019.
Commenting on the research, Michael Wong, Head of M&A, Baker McKenzie Taipei, said: "In the case of Taipei, while the findings of this edition of the Global Transaction Forecast appear to be quite optimistic, there are a few key factors that should provide comfort for those Taiwanese corporates looking for better news after a difficult year. Trade as a percentage of GDP in Taiwan is double the global average, so we are already a well connected part of the global economy, and there are excellent growth opportunities available for companies who are willing to seriously venture out across the Asia Pacific region."
Overall, Asia Pacific M&A activity is forecast to peak at US$754 billion and domestic IPOs at US$82 billion in 2019.