Legal marketing in Asia is all the rage! A liberalization of foreign investment regulation is taking place. It has expanded across the Asia-Pacific region, according to a recent study conducted by international law firm Herbert Smith Freehills. The study, entitled Asia-Pacific M&A Review, “considers performance in 2013 and looks forward to prospects for 2014 across Australia, China, Hong Kong, India, Indonesia, Japan, Myanmar, Singapore, South Korea and Thailand” according to information law firms’ website.
Tony Damian, a Partner in Herbert Smith Freehills Sydney office, was interviewed last week about the report for legal marketing in Asia can attract domestic developments in foreign investment with consistent relaxation of the rules. In the report, he outlined his expectation to see continued rules relaxation governing foreign direct investment throughout the region. He cited in particular China, Indonesia and Myanmar as reflecting significant reduction in regulation.
In Australia, Damian said, a relaxation of rules under a new Korea-Australian Free Trade Agreement. Moreover, it will create a 1 Billion AUS Dollar increase in investment. The Trans-Pacific Partnership Agreement (TPP), Damian says, to implement it likely, creating a globally important trading bloc and increasing inbound foreign direct investment flow into the region. The Trans-Pacific Partnership, as the Washington Post reported last year, is a “free trade deal between the U.S., Canada, and 10 countries in the Asia-Pacific region that’s been under negotiation for nearly a decade. It may expect to eliminate tariffs on goods and services, a host of non-tariff barriers. Moreover, it may harmonize [numerous] regulations when it concludes in 2014.”
New relaxed investment rules in South Korea by legal marketing in Asia, for example, “would allow private equity firms to acquire a company’s entire business division. For example, a lucrative shipping line, rather than restricting the firm to buying a stake in the entire company. That would make it easier to cherry-pick attractive businesses.” according to a report published in Asian Legal Business earlier this month.
The Herbert Smith Freehills report also outlined that:
- “Deal value in the second half of 2013 was up by 45% as compared to the year’s first half. At that time, its deal volume was up by 23% in the same period.
- Energy and Resources were again a key sector driving M&A activity in terms of both deal value and volume.
- Private equity returned as a buy-side force in many countries. Although higher deal volumes were primarily driven by higher mid-market activity.”
Looking at 2014, Herbert Smith Freehills anticipates:
- “Increased divestitures of non-core business and assets across a number of jurisdictions will provide sell-side momentum.
- M&A activity will continue to improve in 2014, and the volume of cross-border deals will increase compared to 2013.
- There will be a continued focus on balance between countries. It will be in the region remaining attractive investment targets and domestic developments in foreign investment. This will also take into account anti-trust and broader M&A law.”
According to Thomson Reuters data, “The Asia-Pacific region had the strongest [M&A] start of the year on record with legal marketing in Asia. It started with declared deals worth US$113 billion and 1,751 sales.” Based on an analysis of the market, this appears likely to continue through 2014.