How did deal activity perform against due diligence benchmarks in 2024? The scorecard for APAC is out. The data from the latest Datasite Forecaster report gives insight into pipeline activity vis-à-vis deal prep time, time spent on due diligence, and deals that closed successfully in 2024.

Globally, new deal kickoffs saw a 12% year-on-year increase in 2024. APAC saw a jump of 17% year-on-year in M&A pipeline activity. Buy-side kickoff activity got a slight bump of 2%, whereas the sell-side activity experienced a sizeable increase in kickoff activity of 21% year-on-year.

Sector-wise, deal activity was led by massive increases in the TMT and Industrials sectors, which saw 89% and 44% increases, respectively. Region-wise in APAC, Japan & Southeast Asia saw sizeable increases in their pipeline activity however, this did not lead to more successful deal closures for either region. Greater China is the only subregion that saw an increase in successful deal closures, with a minimal 1 percentage-point increase.

Regarding diligence time for these deals, year-on-year change was all over the place. Greater China experienced a decrease of 80 days, while Southeast Asia had an increase of 50 days in diligence time.

Let us break this down further into sector-wise and country-wise deal pipeline and cull out the trends emerging in terms of due diligence time.

Digital and industrial might

The TMT sector is projected to be one of the most active in APAC going forward, with 276 ‘for sale’ stories, according to Mergermarket data in Datasite’s Deal Drivers: APAC FY 2024 report. 

TMT's pipeline activity increased by almost 90% compared to 2023, which resulted in TMT being the only industry in the APAC top five to show successful deal closures. The industry presented a median diligence time of 200 days. That is shorter by 56 days compared to the previous year, which is not a small matter. New deal kickoffs for the industrial sector saw an increase of 44%. The industrials & chemicals (I&C) sector is projected to also lead APAC M&A activity in 2025, with 327 anticipated deals according the Mergermarket. 

The energy & power sector saw the largest decrease in pipeline activity of the top five sectors, with a 26% year-on-year decrease in deal kickoffs. The diligence time in the sector also saw a similar percentage point increase year-on-year as this sector took 26 days more to go through the diligence process, resulting in a median of 259 days.

Of all the dealmaking last year, industrials was able to close only 30% of deals successfully, and it decreased its diligence time by 28 days to a median of 158 days. This was comparable to the consumer sector that also got sector-wise spent on diligence to 154 days, which is 33 days shorter compared to the previous year.

The big three + 1

Japan, China, and India solidified their positions as the top bidders in the region. Japan led in volume terms with 3,359 deal announcements, an 8% year-on-year increase, yet aggregate deal value fell by 8.3% over the same period. China maintained its dominance in deal value, reaching US$280bn, a 7.8% increase from the prior year, supported by a select number of high-value transactions.

Japan’s M&A momentum was evident as the country saw a solid increase of 25% in new deal kick-offs year-on-year. The number of deals successfully closed in the last calendar year was 51%. All this was achieved with 149 median days in diligence time.

Similar to Japan, India, too, closed 51% of its deals but added 47 more days to the time taken for due diligence, resulting in a median of 338 days. China has a different story. It closed 27% of its deals even though new deals on its plate were 12% less than the year before. They fine-tuned their diligence time to a median of 316 days, which is 48 fewer days spent on due diligence than last year. year-on-year.

Adding to the mix of the usual suspects is Southeast Asia. The subregion saw sizeable increases in their pipeline activity, even though it did not lead to deal closures for either region. New deal kickoff saw a 31% increase, but the deal completion rate was only 29%, and median diligence time recorded 266 days, which was 50 additional days than last year, the highest in APAC.

According to Mergermarket’s heat chart, Greater China leads with 570 potential transactions across all sectors, representing close to 40% of all activity in the region. India, Southeast Asia, Australia & New Zealand complement this outsized share. These three markets make roughly equal contributions in the heat chart, together accounting for 45% of deals that acquirers have been assessing over in the most recent quarter.

As 2025 rolls out, it will remain to be seen how many of these deals will have a successful closure in the first half of the year and how many will be able to achieve efficiencies and reduce due diligence times.