Asia: Experts raise the alarm over debt-ridden M&A

Experts are raising concerns about debt-ridden mergers and acquisitions being struck by ASEAN nations, say reports.

Standard & Poor’s has reportedly released data analyzing the 100 largest companies in ASEAN nations. The results show that collectively, the companies spent nearly $300 billion on debt-fuelled acquisitions between the end of 2008 and the first quarter of this year.

But reports say these deals could make sense for the Southeast Asian countries. ASEAN is working on establishing a common market known as the Asean Economic Community by the end of next year, and companies are looking to strike deals abroad, though they do not have sufficient funds to do so.

According to S&P, the 100 companies added about $150 billion in debt because they could only finance about half of their $300 billion in mergers.

The research found that nearly half of the $300 billion worth of deals reviewed was related to takeovers made by just 20 companies in Thailand.

Full content: Financial Times

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.