It is no secret that 2021 was a big year for M&A in Asia. As the impacts of the COVID-19 pandemic began to lessen, deals once again picked up and the future began to look brighter. As activity increased into a steady flow of blockbuster deals, lawyers found their hands full — and their expertise in hot demand. Now, as 2022 is well and truly underway, lawyers are strapping in for another eventful year of work.

 

The year 2021 was a strong one for M&A activity in Asia. According to McKinsey, the number of deals in Asia was more than 20 percent higher than it had been in 2020—and not just because of a rebound from COVID-19: Asian deal volume for 2021 was 30 percent higher than it had been in the pre-pandemic period of 2019. Average deal size in Asia is also broadly on the rise; the value of such deals in 2021 was about 40 percent higher than 2019 levels and is trending up over a multiyear span, McKinsey added.

Southeast Asia served as a remark-able hive of activity, with M&A activity surging and lawyers working through mammoth deals.

Publicly announced deals involving Asian companies hit $707.7 billion in January-June — up 75 percent from the same period the previous year, Refinitiv data showed, indicating the immense scale of work and a more optimistic business climate.

In July 2021, Southeast Asia deals hit a record $124.8 billion as head-line-grabbing transactions — including Grab’s $40 billion merger with U.S. special-purpose acquisition company (SPAC) Altimeter Growth Corp — racked up, Reuters reported. But Mainland China and Hong Kong were the most active markets for deals, followed by Australia and India, S&P Global Market Intelligence data found.

Given the volume of work and the steady rise, it’s little wonder that business leaders are looking ahead with optimism. PwC’s annual global CEO survey published in January 2022 found CEOs of private equity and technology companies were confident of their companies’ growth over the next 12 months — both sectors of which saw the highest volumes and values of M&A in 2021.

While technology-related deals kept businesses busy in Asia, environmental, social and governance (ESG) dealmaking were also a visible trend — a point noted by EY analysis.

According to EY’s 2021 findings, the value of ESG-related deals increased from $35.7 billion in 1H 2020 to $96.5 billion in 1H 2021. These deals are likely to continue to increase along with the pressure on CEOs to achieve suitability targets.

The ESG trend, accelerated by the pandemic resulted in a “significant” rise in the number and value of deals in renewable energy and technology being harnessed to reduce carbon emissions — a development that is here to stay, according to Norton Rose Fulbright analysis published in January.

Along with the uptick in activity, another consistent trend spanning 2021 and the start of 2022 is the value firms place in experienced M&A lawyers. In hot demand in Asia last year, law firms with an Asia presence continue to add new headcount and invest in their capital market teams across the region. For lawyers who proved themselves last year, their expertise is only growing more valuable.

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