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Asia-Pacific M&A disclosed deal value more subdued in H1'16

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Asia-Pacific M&A disclosed deal value more subdued in H1'16

Editor's note: Thisanalysis is comprehensive for deals where the target bank is based in theAsia-Pacific region and the deal value is equal to or greater than US$50million.

Asia-Pacific banks' deal activity was more subdued in the firsthalf than a year ago, as the aggregate disclosed deal value fell to US$7.94billion from US$10.56 billion. In the first six months of 2016, there were 17disclosed deals involving SNL Financial-covered Asia-Pacific banks, nearly atpar with the 18 deals disclosed in the prior-year period.

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Leading the pack are deals involving Chinese firms, totalingsix deals in the first half. Chinese firms have been involved in 27 bankingdeals since 2013 with a total deal value of US$29.29 billion.

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China LifeInsurance Co. Ltd.'s agreement to shares of fromCitigroup Inc. andIBM Credit LLC for atotal of US$3.56 billion was the biggest disclosed deal in the half.

There was an uptick in the proportion of cross-bordertransactions in the first half compared to a year ago. Transactions betweendeal participants from different countries made up 52.94% of deals in the half,compared to just 33.33% in the first half of 2015.

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A number of those cross-border deals involved Indian banks,which also saw more deal activity in the first half than in 2015, with someforeign investors opting to sell their stakes in Indian banks. sold 18.1 millionshares in Kotak Mahindra BankLtd. to CanadaPension Plan Investment Board for a deal amounting to US$168.8million. Undisclosed buyers also brought shares in the bank for US$134.4million.

One Indian banking deal involved local insurer raising its stake inIDBI Bank Ltd. to14.37% from 7.21%. IDBI Bank has been the subject of rumored deals as thegovernment is reportedly moving ahead with plans to dilute its stakein the bank to below 50%.

Meanwhile, South Korea's two banking deals were due toforeign buyers moving into the country's savings bank space. Taiwan'sYuanta Commercial Bank Co.Ltd. acquired HanShin Savings Bank for US$112.2 million,while a unit of New York-based J.C. Flowers & Co. LLC agreed to acquire HK Savings Bank for US$186.6 million.