Banks miss out on Asian M&A deals

Source:Reuters Published: 2014-4-21 21:08:01

From Singaporean sovereign investor Temasek to China's CITIC, Asian companies are increasingly relying on internal talent to get deals done. The loss of business in an already tough market means big investment banks will have to work harder to prove their worth.

International banks have had a minimal role in two recent mega-deals. Temasek used its own mergers-and-acquisitions (M&A) team to buy a 24.95 percent stake in AS Watson, the retail business of Li Ka-Shing's Hutchison Whampoa, in March. Hong Kong-listed CITIC Pacific has named only its own subsidiary and a related outfit as advisers on its $36.5 billion acquisition of assets from its parent. Morgan Stanley worked on the deal, say people familiar with the situation, but isn't mentioned in public documents.

There's still room for the big outside firms on complex deals or those with regulatory issues. Temasek hired Credit Suisse to help it buy the share it didn't already own in commodity trading house Olam International for $2.1 billion. Deals that require financing, like WH Group's takeover of pork producer Smithfield in September 2013, will also create extra fees.

The author is Una Galani, a Breakingviews columnist.

Reuters

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