Asia-Pacific mergers slow amid subprime uncertainty


The uncertainty gripping the financial world has slowed merger-and-acquisition (M&A) deals in the Asia-Pacific region, a published report said Thursday.

M&A activity, which hit record highs in June and July, has dropped in the first half of August, Dealogic data said.

Excluding Japan, the region saw 1,003 M&A deals worth US$62.8 billion in July, said the report in The Business Times. So far this month, only 261 deals worth US$3.7 billion have been wrapped up.

While financial activity often slows in August, the edginess over the U.S. subprime problems and effects on markets worldwide has added to the inactivity, the report said. As more financial institutions reveal the extent of their exposure to the subprime market, the unease is growing.

“In general, the subprime market would have affected the ability of private equity houses to raise funds from the debt markets for leveraged buy-out deals,” Benjamin Kan, managing director of PricewaterhouseCoopers corporate finance, was quoted as saying.

Banks are evaluating the impact of the subprime woes on their own balance sheets, Kan said. “They are taking a more conservative stand on credit and are scaling back on extending credit,” Kan added.