Asia’s markets, like the rest of the world, have seen a steep decline in dealmaking in the first half of the year. But macroeconomic trends, increase in asset quality and lucrative exit opportunities promise a better future for the region’s traditional and emerging markets.
Asia’s dealmaking landscape in the first half of the year paints a gloomy picture if looked at from 30,000 kilometres above the ground. Its colourful tapestry has been bombed with sharp declines in both deal value and volume, with thick clouds of geopolitical uncertainty, high interest rates and brutal fundraising conditions looming overhead.
The 7,966 deals announced in the Asia-Pacific region during January-July 2024, was 9.9 percent lower when compared to the 8,840 deals announced during the same period in previous year, according to GlobalData, an analytics company.
And this was across the board. The number of M&A deals declined by 8.3 percent, and the volume of private equity and venture financing deals fell by 25.4 percent and 10.9 percent, respectively.
Even deal value for the first half of the year, at $228 billion, is the lowest it’s been in the last five years, according to a PwC report.
But breaking through the clouds, you see a more nuanced picture of mixed growth. China, Australia, South Korea, Singapore, Malaysia, Hong Kong and Indonesia saw declines in deal volumes, but India, Japan and Thailand witnessed their respective deal volumes improve by 2.4 percent, 5.7 percent and 8.5 percent.
Notably, the overall single-digit decline is nothing compared to 19.6 percent, 16.9 percent, 11.7 percent and 27.7 percent deal volume drop witnessed by North America, Europe, Middle East and Africa, and South and Central America respectively during January-July 2024, evidencing that while the decline in dealmaking in a global trend, investors showed more faith in the APAC region that anywhere else in the world.
Furthermore, private equity portfolios in Asia, which have been on their books for over four years, are primed for sale, promising a flurry of dealmaking in the second half of the year. Maturing markets in emerging Asia are also looking at more inorganic ways to expand, chief among them acquisitions. The strong focus on technology in Asia is also set to drive forward a new age of consolidation, as the number of small players in the market rise. The market is ripe for the taking.
This can be evidenced by global funds that have been consistently moving to Asian markets considering the growing range of high-quality assets, lucrative exit opportunities and a range of diverse markets to build a stable high-yielding portfolio. Goldman Sachs, Stonepeak, CVC Capital, KKR & Co, Hahn & Company and Vertex Holdings have all set up multi-billion-dollar funds dedicated to Asia this year.
SINGAPORE REMAINS M&A HUB
The first half quarter of the year saw a steep decline in dealmaking going through Singapore, owing to global capital’s concerns with overall macroeconomic outlook, concerns about China’s impact on Southeast Asia and high interest rates.
Christian Chin, partner and co-head of Allen & Gledhill’s M&A practice says that while such factors tend to give pause to decision-makers, “after the post-pandemic lull induced by macroeconomic and geopolitical instability, there is now eagerness to return to business-as-usual.”
Despite the challenging environment for deal-making, exits and fundraising, Singapore remains one of Asia’s top M&A destinations owing to its strong regulatory policies and stable political environment.
“Singapore’s main advantages relate to how quickly and efficiently deals can get done – the laws are clear, and where approvals are needed, these tend to be processed quickly and the outcomes are often predictable,” explains Chin.
Since April, the value of deals involving companies based in Singapore has soared to $23.8 billion. This marks a 102 percent jump from the second quarter of 2023, an IMC report finds.
It is not just the number of deals – these are strategic and large transactions that place Singapore as the hub for Southeast Asia, with unprecedented inbound foreign direct investment by international names, the Straits Times reported.
The string of marquee deals in the second quarter include Singtel-KKR consortium agreeing to invest $1.75 billion in ST Telemedia (STT) Global Data Centres, Allianz offering $1.6 billion for a majority stake in Income Insurance, Shell acquiring liquefied natural gas trader Pavilion Energy from Temasek, a new $.7.8 billion semiconductor joint venture between Vanguard International Semiconductor Corporation and NXP Semiconductors, and OCBC’s $1 billion unconditional general offer to buy stake in Great Eastern Holdings.
In Southeast Asia’s private equity market, Singapore maintained its lion’s share of deals despite an overall drop in deal activity, securing $3.7 billion out of a total of $9 billion PE deals in the region in the first half of the year, a Bain & Company report found. The island nation also led in deal volume, picking up 62 of the 109 deals done across the region. Notably, Singapore continues to see a steady growth in fintech deals, amid a global decline in the industry. The Singapore government’s policy of effectively recognising digital rights, regulating the decentralised nature of financial technology, and creating a robust risk management framework is placing it ahead of other Western competitors as an investment hub.
The cryptocurrency and blockchain segments of Singapore’s fintech market recorded $211.90 million across 72 deals in the first half of 2024, a 22 percent uptick from the $166.30 million over 38 deals recorded in the second half of 2023, KPMG reported.
Investors, while confident in Singapore’s strong corporate governance and political climate, are taking a more cautious approach to dealmaking. They prefer taking a longer look at the macroeconomic conditions, competitive markets and the quality and potential of future assets in the island nation’s market – a trend that is likely to continue.
Significant pent-up demand for PE investors, a need to spur exits and the rise of healthcare and financial technology as attractive sectors are likely to enhance dealmaking in the coming months.
“The momentum of the first three quarters is likely to carry through the rest of the year, and we expect infrastructure, healthcare and technology sectors to continue to be active, and activity to pick up in the real estate sector,” Chin says.
AMBITIOUS INDONESIA
Among emerging markets in Asia, none has more promise than Indonesia, which has ambitious plans to bring in strong global investment through acquisitions and private equity investments for its fast-maturing economy, with a strong focus on minerals, technology, consumer and retail, energy and natural resources.
Indonesia secured $53 billion in combined foreign and domestic investments in the first half of 2024, with foreign investors accounting for over 50 percent of this number. Singapore remains the country’s top investor, with $8.8 billion committed in the first half of the year. China, Hong Kong, the U.S. and Japan also maintain strong portfolios in the archipelago.
As in 2023, the downstream metal industry dominates the investment space, with $7.8 billion coming in from local and international sources in the first half of the year. Indonesia aims to dominate the nickel market – as the holder of the world’s largest nickel reserves – looking to build an international electric vehicle supply chain and become one of the top three battery producers by 2027.
Transport and telecommunications was the second largest sector in terms of dealmaking this year, with over $5.7 billion in deals completed so far, as the country looks to invest heavily in infrastructure for its rapidly urbanizing population. In July, Metro Pacific Tollways Corp and Singapore sovereign wealth fund GIC announced a 35 percent acquisition worth $1 billion in a unit of Indonesian toll-road operator PT Jasa Marga. Earlier in the year, APG Asset Management invested in a $2.75 billion Indonesia toll road investment platform, along with the Indonesia Investment Authority and Abu Dhabi Investment Authority.
Investors, while optimistic about Indonesia’s growth trajectory, raise concerns about slow regulatory process and bureaucratic red tape and say a stronger incentive program will further enhance the country’s attractiveness as an investment destination.
RESILIENT JAPAN
While the Bank of Japan recently shocked the world by increasing interest rates, recent government and market initiatives aimed at enhancing corporate governance and capital allocation in Japan have spurred a wave of M&A and private equity activity in the country. These reforms, which encourage companies to adopt a more transparent and shareholder-friendly approach, have created a favourable environment for dealmaking.
Japan has seen 2,321 M&A deals in the year as of August 22, well on track to meet last year's number of 4015, with a healthy number of outbound, inbound and domestic deals, a JP Morgan report said.
Large Japanese drugmakers have been on an overseas acquisition spree of late as they look to replenish their drug portfolios, amid a shrinking domestic economy. Otsuka Pharmaceutical signed a $1.1 billion agreement to acquire Boston-based Jnana Therapeutics while Ono Pharma announced the acquisition of U.S.-based cancer drugmaker Deciphera for $2.4 billion, in the past two months.
Outside of pharma, Japan Tobacco will acquire Vector Group, the fourth-largest tobacco company in the United States, for $2.4 billion. Japanese homebuilder Sekisui House purchased Denver-based MDC Holdings for $4.9 billion.
Japan has emerged as the latest hotspot for private equity investment as geopolitical risks and weak return outlooks dampened the attractiveness of other traditional Asian markets, amongst them notably China.
KKR & Co plans to buyout Japanese system developer Fuji Soft for $4.09 billion, Blackstone will take Japanese digital comic distributor Infocom private for $1.74 billion, while selling its stakeholding in Alinamin Pharmaceuticals to MBK Partners for $2.17 billion, and CVC Capital Partners will acquire the country’s fifth-biggest pharmacy store Sogo Medical Group for $1.2 billion.
Going forward, the Japanese market will see more dealmaking from market, an increase in unsolicited offers following the notification of new corporate takeover guidelines in 2023, and an increase in shareholder activism-related dealmaking owing to improving disclosure guidelines and growing interest of U.S. activist investors.
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OUR RESEARCH
Our research does not cover Australia and New Zealand. OUR RANKINGS Our rankings are based on the following metrics:
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CHINA DOMESTIC |
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Commerce & Finance Law Offices Global Law Office Haiwen & Partners Han Kun Law Offices Jingtian & Gongcheng JunHe King & Wood Mallesons Tian Yuan Law Firm Zhong Lun Law Firm |
AllBright Law Offices Dacheng Law Offices DaHui Lawyers DeHeng Law Offices Grandall Law Firm Grandway Law Offices Guantao Law Firm Jia Yuan Law Offices Jincheng Tongda & Neal Law Firm Llinks Law Offices |
AnJie Broad Law Firm Hylands Law Firm Co-effort Law Firm Docvit Law Firm East & Concord Partners FenXun Partners Hui Ye Law Firm Long An Law Firm Merits & Tree Law Offices Shihui Partners T&D Associates Tahota Law Firm V&T Law Firm |
Anli Partners Beijing DHH Law Firm Boss & Young Attorneys at Law China Commercial Law Firm HHP Attorneys-At-Law Hiways Law Firm JunZeJun Law Offices K&H Law Firm Kangda Law Firm L&H Law Firm Tiantai Law Firm W&H Law Firm Yenlex Partners |
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CHINA INTENATIONAL |
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Clifford Chance Freshfields Bruckhaus Deringer Linklaters Skadden, Arps, Slate, Meagher & Flom |
A&O Shearman Baker McKenzie FenXun Davis Polk & Wardwell DLA Piper Hogan Lovells Norton Rose Fulbright Paul, Weiss, Rifkind, Wharton & Garrison Simpson Thacher & Bartlett White & Case |
Cleary Gottlieb Steen & Hamilton Eversheds Sutherland Kirkland & Ellis Morgan, Lewis & Bockius Morrison & Foerster Orrick, Herrington & Sutcliffe Paul Hastings Slaughter & May Sullivan & Cromwell |
Ashurst Bird & Bird CMS Dorsey & Whitney Gibson, Dunn & Crutcher Gide Loyrette Nouel Gowling WLG Herbert Smith Freehills Jones Day K&L Gates Latham & Watkins Lee & Ko Mayer Brown Milbank MMLC Group Nishimura & Asahi Oldham, Li & Nie O'Melveny Reed Smith Ropes & Gray Seyfarth Shaw Simmons & Simmons Wilson Sonsini Goodrich & Rosati |
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HONG KONG |
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Clifford Chance Freshfields Bruckhaus Deringer Kirkland & Ellis Latham & Watkins Linklaters Skadden, Arps, Slate, Meagher & Flom Slaughter and May |
A & O Sherman Baker McKenzie Davis Polk & Wardwell Herbert Smith Freehills Norton Rose Fulbright Simpson Thacher & Bartlett Sullivan & Cromwell Weil, Gotshal & Manges |
Ashurst Deacons Debevoise & Plimpton Gibson, Dunn & Crutcher Hogan Lovells King & Wood Mallesons Mayer Brown Morrison & Foerster Paul, Weiss, Rifkind, Wharton & Garrison Reed Smith Richards Butler White & Case |
Akin Gump Strauss Hauer & Feld Bird & Bird Charltons Cleary Gottlieb Steen & Hamilton CMS Dechert Dorsey & Whitney Eric Chow & Co. in Association with Commerce & Finance Law Offices Eversheds Sutherland Fangda Partners Gallant Goodwin GPS Legal Howse Williams K&L Gates Milbank Minter Ellison MMLC Group Morgan, Lewis & Bockius Oldham Li & Nie O'Melveny Paul Hastings Proskauer Rose Ropes & Gray Seyfarth Shaw Sidley Austin Simmons & Simmons Stephenson Harwood Stevenson Wong & Co Tanner De Witt Taylor Wessing Vivien Chan & Co Wilson Sonsini Goodrich & Rosati YYC Legal |
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INDIA |
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AZB & Partners Cyril Amarchand Mangaldas IndusLaw JSA Advocates & Solicitors Khaitan & Co. Luthra & Luthra Law Offices S&R Associates Saraf and Partners Shardul Amarchand Mangaldas & Co Talwar Thakore & Associates (TT&A) Trilegal |
Anagram Partners Argus Partners Bharucha & Partners Dentons Link Legal Desai & Diwanji DSK Legal Economic Laws Practice (ELP) HSA Advocates Kochhar & Co. Majmudar & Partners Nishith Desai Associates P&A Law Offices Phoenix Legal Quillon Partners Resolut Partners Samvad Partners Touchstone Partners Vaish Associates, Advocates Veritas Legal |
ALMT Legal Chandhiok & Mahajan, Advocates & Solicitors Clasis Law Fox & Mandal Fox Mandal & Associates Juris Corp Krishnamurthy & Co. (K Law) Lakshmikumaran & Sridharan Attorneys Rajani Associates Sarthak Advocates & Solicitors Singhania & Partners Spice Route Legal Tatva Legal Vertices Partners Wadia Ghandy & Co |
Aekom Legal Ahlawat & Associates AKS Partners AnantLaw Archer & Angel Begur & Partners Burgeon Law Dhir & Dhir Associates Dua Associates Gravitas Legal Hammurabi & Solomon Partners King. Stubb & Kasiva LexCounsel Maheshwari & Co. Advocates and Legal Consultants Mansukhlal Hiralal & Co NovoJuris Legal Pioneer Legal Sagus legal Stratage Law Partners Tempus Law Associates |
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INDONESIA |
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ABNR Counsellors at Law Assegaf Hamzah & Partners Ginting & Reksodiputro in association with A & O Shearman Hadiputranto, Hadinoto & Partners, a member firm of Baker McKenzie Hiswara Bunjamin & Tandjung in association with Herbert Smith Freehills SSEK Law Firm |
Hanafiah Ponggawa & Partners – Dentons HPRP Makarim & Taira S. Makes & Partners Oentoeng Suria & Partners in association with Ashurst PwC Legal Indonesia Soemadipradja & Taher Walalangi & Partners (in association with Nishimura & Asahi) Widyawan & Partners (in association with Linklaters) |
AYMP Atelier of Law Christian Teo & Partners Hogan Lovells DNFP, in association with Dewi Negara Fachri & Partners Mochtar Karuwin Komar Roosdiono & Partners UMBRA – Strategic Legal Solutions |
ADCO Law Adnan Kelana Haryanto & Hermanto ARKO (Armila & Rako) Law Office Azwar Hadisupani Rum & Partners Fikry Gunawan FKNK Law Firm H&A Partners (in association with Anderson Mori & Tomotsune) Hendra Soenardi Hutabarat Halim & Rekan (HHR Lawyers) IABF Law Firm Imran Muntaz & Co Leks&Co Sutedja & Associates in association with Gurbani & Co TNB & Partners in association with Norton Rose Fulbright Australia TnP Law Firm Witara Cakra Advocates (WCA) in association with White & Case Indonesia |
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JAPAN DOMESTIC |
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Anderson Mori & Tomotsune Atsumi & Sakai Mori Hamada & Matsumoto Nagashima Ohno & Tsunematsu Nishimura & Asahi TMI Associates |
Hibiya-Nakata Miura & Partners Oh-Ebashi LPC & Partners Ushijima & Partners |
City-Yuwa Partners Gaien Partners Kojima Law Offices Southgate Tokyo International Law Office (TKI) |
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JAPAN INTENATIONAL |
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A & O Shearman Baker McKenzie (Gaikokuho Joint Enterprise) Davis Polk & Wardwell Herbert Smith Freehills Morrison & Foerster/ Ito & Mitomi Simpson Thacher & Bartlett White & Case Law Offices (Registered Association) |
Clifford Chance DLA Piper Freshfields Bruckhaus Deringer Hogan Lovells Horitsu Jimusho Gaikokuho Kyodo Jigyo Jones Day Latham & Watkins Gaikokuho Joint Enterprise Linklaters Paul, Weiss, Rifkind, Wharton & Garrison Skadden, Arps, Slate, Meagher & Flom |
Ashurst EY Law King & Spalding Mayer Brown GJBJ Milbank Morgan, Lewis & Bockius Norton Rose Fulbright Orrick, Herrington & Sutcliffe Paul Hastings PwC Legal Japan Ropes & Gray Simmons & Simmons Squire Gaikokuho Kyodo Jigyo Horitsu Jimusho |
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MALAYSIA |
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Christopher & Lee Ong Rahmat Lim & Partners Shearn Delamore & Co Skrine Wong & Partners (member firm of Baker McKenzie) |
Abdullah Chan & Co Adnan Sundra & Low Kadir Andri & Partners Lee Hishammuddin Allen & Gledhill Mah-Kamariyah & Philip Koh Mohamed Ridza & Co Zaid Ibrahim & Co (in association with KPMG Law) Zain & Co |
Albar & Partners Azmi & Associates Cheang &Ariff Chooi & Company D&P Law Group Donovan & Ho Foong & Partners Gan, Lee & Tan Halim Hong & Quek Jeff Leong, Poon & Wong LAW Partnership Lim Jo Yan & Co MahWengKwai & Associates Naqiz & Partners Peter Ling & van Geyzel Raja, Darryl & Loh Ramesh Dipendra Jeremiah Law Tay & Partners Wong Beh & Toh Zul Rafique & Partners |
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PHILIPPINES |
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ACCRALAW Picazo Buyco Tan Fider & Santos Quisumbing Torres (member firm of Baker McKenzie) Romulo Mabanta Buenaventura Sayoc & De Los Angeles SyCip Salazar Hernandez & Gatmaitan Villaraza & Angangco (V&A Law) |
Castillo Laman Tan Pantaleon & San Jose Cruz Marcelo & Tenefrancia Gatmaytan Yap Patacsil Gutierrez & Protacio (C&G Law) Martinez Vergara Gonzalez & Sociedad PJS Law |
DivinaLaw Gorriceta, Africa, Cauton & Saavedra Gulapa & Lim (Gulapa Law) Insights Philippines Legal Advisors (a member firm of KPMG Law network) Kua Sy & Yeung Law Offices (SKY Law) Platon Martinez Flores San Pedro & Leaño Quiason Makalintal Sarmiento Loriega Law Firm Serrano Law Siguion Reyna, Montecillo & Ongsiako |
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SINGAPORE DOMESTIC |
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Allen & Gledhill Morgan Lewis Stamford Rajah & Tann Singapore WongPartnership |
Drew & Napier TSMP Law Corporation |
Baker McKenzie Wong & Leow Bird & Bird ATMD CNPLaw Dentons Rodyk Duane Morris & Selvam Harry Elias Partnership RHTLaw Shook Lin & Bok |
Asia Practice Atlas Asia Law Corporation Avant Law Bih Li & Lee CHP Law Eng & Co JurisAsia Oon & Bazul Prolegis Quahe Woo & Palmer RPC Premier Law Rubicon Law Virtus Law (Member of the Stephenson Harwood (Singapore) Alliance) Withers KhattarWong |
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SINGAPORE INTERNATIONAL |
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A&O Shearman Clifford Chance Freshfields Bruckhaus Deringer Latham & Watkins Linklaters Milbank |
Herbert Smith Freehills Hogan Lovells Lee & Lee Jones Day Morrison & Foerster Norton Rose Fulbright Skadden, Arps, Slate, Meagher & Flom White & Case |
Ashurst Dechert DLA Piper Gibson, Dunn & Crutcher HFW K&L Gates Straits Law King & Spalding King & Wood Mallesons Pinsent Masons MPillay Sidley Austin Stephenson Harwood (Member of the Stephenson Harwood (Singapore) Alliance) |
Bryan Cave Leighton Paisner Clyde & Co CMS Cameron McKenna Nabarro Olswang (Singapore) Eversheds Sutherland LNT & Partners Mayer Brown PK Wong & Nair Nishimura & Asahi-Bayfront Law Alliance Reed Smith Ropes & Gray |
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SOUTH KOREA DOMESTIC |
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Bae, Kim & Lee Kim & Chang Lee & Ko Shin & Kim Yulchon |
Barun Law DR & AJU Jipyong KL Partners LAB Partners SEUM Law Yoon & Yang |
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SOUTH KOREA INTERNATIONAL |
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Cleary Gottlieb Steen & Hamilton O’Melveny Paul Hastings Ropes & Gray Skadden, Arps, Slate, Meagher & Flom White & Case |
Ashurst Baker McKenzie DLA Piper Latham & Watkins Milbank Sheppard, Mullin, Richter & Hampton Simpson Thacher & Barlett |
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TAIWAN |
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Baker McKenzie Jones Day Lee and Li, Attorneys-at-Law Tsar & Tsai Law Firm |
Chen & Lin Eiger Law Formosa Transnational Attorneys at Law K&L Gates LCS & Partners Lexcel Partners Lin & Partners Attorneys-At-Law Winkler Partners |
Dacheng Law Offices DTT Attorneys-At-Law Formosan Brothers Attorneys at Law Guo Ju Law Firm Innovatus Law Lee, Tsai & Partners Liang & Partners Nishimura & Asahi PricewaterhouseCoopers Legal, Taiwan Russin & Vecchi (International Legal Counsellors) |
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THAILAND |
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A&O Shearman Baker McKenzie Linklaters (Thailand) Weerawong, Chinnavat & Partners |
Chandler MHM DLA Piper Hunton Andrews Kurth Siam Premier International Law Office Thanathip & Partners Tilleke & Gibbins TTT+Partners |
Axis Consultants (Thailand) Blumenthal Richter & Sumet DFDL ILAWASIA ILCT KPMG Law Thailand Kudun & Partners LawPlus Norton Rose Fulbright Rajah & Tann(Thailand) SCL Nishimura & Asahi Silk Legal SRPP The Capital Law Office Watson Farley & Williams |
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VIETNAM |
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A & O Shearman Allens Baker McKenzie Frasers Law Company Freshfields Bruckhaus Deringer VILAF YKVN |
DFDL Duane Morris Vietnam Hogan Lovells LNT & Partners Mayer Brown Nishimura & Asahi Rajah Tann LCT Lawyers Tilleke & Gibbins Vision & Associates |
ACSV Legal Allen & Gledhill Apolat legal law firm ATS Lawyers Bizconsult Law Firm Bizlink Lawyers Dilinh Legal DIMAC Dentons LuatViet Global Vietnam Lawyers Indochine Counsel KPMG Law Lee & Ko Lexcomm Vietnam MHM Vietnam |