SINGAPORE, June 22 (Bernama) -- Asia Pacific merger and acquisition (M&A) activity, excluding Japan, totaled US$223.3 billion so far this year, dropping 29.5 per cent after a strong first six months in 2011 (US$316.6 billion).

According to Thomson Reuters Asia-Pacific (excluding Japan) M&A Preliminary Financial Advisory Review, quarterly volume by deal value, slightly declined 0.9 per cent to US$111.1 billion in the second quarter of 2012 from the last quarter, while deal count slowed down 11.8 per cent to 2,052 transactions.

Despite two mega-deals announced this quarter - DBS Group's US$7.4 billion acquisition of Bank Danamon and Alibaba Group's US$7.1 billion repurchase - the start of 2012 witnessed the lowest semi-annual volume since the first half of 2009 (US$139.4 billion).

The total number of deals announced in the Asia Pacific has fallen 26.2 per cent to 4,379, the slowest semi-annual start by deal count since the first half of 2005 (4,248 deals).

The Asia Pacific's completed M&A activity witnessed its third consecutive quarterly decline in Q2 2012 as deal value decreased 36.9 per cent from Q1 2012 to US$64.0 billion, the lowest quarterly volume since Q2 2009.

The Asia Pacific's completed M&A totaled US$165.6 billion, down 37.9 per cent from the first half of 2011.

M&A targeting Asia-Pacific companies declined 29.5 per cent to US$176.7 billion thus far, compared to the first six months last year, even with a 4.9 per cent sequential increase to US$90.4 billion this quarter from the first quarter of 2011.

Chinese companies continued to be the preferred target by both domestic and foreign acquirers with US$66.7 billion, down five per cent from the first half of 2011, and capturing 38 per cent of the Asia Pacific-target M&A activity.

Notably, Indonesia and Malaysia saw a significant uptick in deal value compared to the first half of 2011, increasing 62 per cent and 33 per cent, respectively.

The United States was the most active non-Asian acquirer of Asia Pacific companies with deals worth US$8.0 billion, or 12.9 per cent of the region's inbound acquisitions, and had the most number of announced deals with 185 transactions.

After witnessing consecutive quarterly declines since the start of 2011, private equity-backed M&A in the Asia Pacific recovered during the second quarter of 2012 as deal value increased 32.9 per cent to US$5.0 billion from the previous quarter.

However, the value of PE-backed deals so far this year amounted to US$8.8 billion, a 54.9 per cent drop from the first half of 2011, and the slowest start since 2009 when first-half volume totaled US$5.5 billion.

The bulk of activity was in the Energy & Power sector with US$2.5 billion (28.3 per cent market share).

Private equity-backed acquisitions across all sectors were down except for Healthcare as deal value doubled to US$668.9 million from the first half of 2011.

Australia (US$2.7 billion), China (US$2.3 billion) and India (US$1.4 billion)accounted for a combined market share of 71 per cent.