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Indonesia: The next global M&A hotspot?

28 April 2014
MNC Business Channel – Economic Buzz

Indonesia: The next global M&A hotspot?

Inorganic growth through mergers and acquisitions (M&A) is high on the agenda in 2014, as the US, Europe and Japan move into growth territory while opportunities beckon in emerging markets. Jeffrey Bahar, Deputy Chief Executive Officer of Spire Research and Consulting, shared his views on the trend of M&A within Asia, particularly Indonesia, on MNC Business Channel – Economic Buzz.

Bahar commented that Southeast Asia, particularly Indonesia, remains a key hotspot on the radar of international investors when it comes to M&A deals. In Indonesia, M&A deals, primarily in the retail banking and airlines sectors, have chalked up to USD10 billion in investment.

Bahar remarked that the banking and financial services sectors, as well as the telecommunications industry which provides services to more than 300 million mobile phone subscribers, looked bullish. The digital realm – especially the e-commerce sector – will also see more investment from US, European and Korean companies coming into Indonesia and other South-East Asian markets where smart-phone penetration is high.

The manufacturing industry is reckoned as a lucrative sector too, due to cost and logistics advantages in Indonesia and South-East Asia. However, not all M&A deals in Indonesia would be successful, as the country aims to create fair and equal competition amongst businesses and strives to protect the national interest.

With the implementation of the ASEAN Economic Community (AEC) in 2015, more M&A opportunities will arise, especially in the services sector. For instance, with the rise of medical tourism, more patients will be on the lookout for health-related services; resulting in more international healthcare providers shifting their focus to Singapore, Malaysia and Thailand.

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