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The Asia Chronicles: Focus on M&A

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[Ed. note / Disclosure: Please note that this post is authored not by the Asia Corporate Lawyers but by the Asia Recruiting Team at Kinney Recruiting, sponsor of the Asia Chronicles and an ATL advertiser. Kinney has made more placements of U.S. associates and partners in Asia than any other firm in the past two years.]
This week, we are going to very briefly discuss the state of the market for major law firms in Asia, with a focus on M&A, and with our usual slant towards Hong Kong / China (as that is where the majority of the hiring is taking place these days). In future editions of the Asia Chronicles, we plan to eventually devote an article to all the major practice areas in Asia, as well as each major Asia market generally (e.g., Tokyo, Shanghai, Beijing, Singapore and Hong Kong).
Notwithstanding the global economic slowdown, most of our U.S. associate friends in Asia remain busy. Some, including the authors of prior installments of the Asia Chronicles, are as busy as ever. They are so slammed, in fact, that these poor writers don’t have time to pen the Asia Chronicles this week (as well as some of the past several weeks — or do their laundry, for that matter). But that is another story for another day, when we focus more on quality of life for U.S. associates in Asia.
So while we are authoring this week’s edition of the Chronicles, as an emergency fill-in, we thought it best to provide our readers with some very basic information and facts about the topic at hand.
A number of U.S. and British firms in Asia, especially in Hong Kong / China, are actively building up their M&A practices. This is no surprise when considering current and projected market conditions. In fact, a survey just completed this month by Simmons & Simmons of 200 CEOs and CFOs of leading companies in the Asia Pacific region shows that 91% of the respondents believe that the level of M&A activity will increase or remain the same over the next twelve months, with over two-thirds of respondents believing M&A activity across the Asia-Pacific region will increase over that time frame, and with 87% of respondents believing that there will be increased M&A activity in China in the next twelve months.
Read more, after the jump.


Fifty-five percent of the Simmons survey respondents believe they are most likely to acquire listed companies within the next twelve months; however, 59% of respondents still expect North American companies to be the most prevalent buyers in inbound M&A activity in the region over the next year. Keep in mind that outbound investments from China last year reached a record high of well over $30 billion, seven times more than in ’03. This trend will likely continue due to economic growth in China, the global slow down and tightening of credit markets making funds from China even more sought after, and to the significant lowering in China of legal restraints to outbound investments in recent years. Notwithstanding the decrease in private equity deals worldwide, 71% of the respondents believe that private equity buyouts will increase in the Asia Pacific region in the next twelve months.
Damon Le-Maitre, head of the international corporate practice at Simmons & Simmons, summarizes the survey results by stating, “Clearly, the credit crunch issues affecting the U.S. and Europe have not dented confidence in the Asia-Pacific region. With 87% of CEOs and CFOs in China believing that China will see increased M&A activity, there appears to be no loss of appetite for doing deals in China.” Tom Deegan, another partner at the firm, says: “Being the fourth largest economy in the world and breathing down the neck of Germany and Japan, demand for Energy and Infrastructure investments in China is at an all time high. Foreign investors are keen to take advantage of the M&A opportunities available here.”
The first ever global strategic survey by the law firm services group of Pricewaterhouse Coopers’ Private Company Services practice, completed in late ’07, shows that U.S. and U.K. law firms have made substantial investments in China and see China as the driving force behind any profit boosts in 2008. Co-chair of the PWC law firm services group, Stanley Kolodziejczak, projects for ’08, “As we move into year two of the survey, we expect to see a number of emerging trends including increased profitability of U.S. firms’ foreign offices as they mature, a more in-depth focus on firms opening in China and additional focus on human resource initiatives relating to lateral attorneys and retention issues.” The survey in ’08 also will address the conclusion that “globalization has become the new cornerstone strategy of most large law firms.”
What does all this mean for the U.S. associate lateral hiring market in China in particular, and Asia in general? Well, we’ll get back to you in detail on this subject in the next Asia Chronicles, later in the week. Try not to let the suspense affect your work!
Earlier: Prior installments of the Asia Chronicles (scroll down)

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