Valuations to drive M&A activity in 2023

Valuations of companies and industry consolidation could be a key driver to mergers and acquisitions (M&As) in 2023.

Speaking with StarBiz, Ian Yoong Kah Yin, who is a high-net worth investor and former investment banker, said there are many small to mid capitalisation companies on the local exchange which are trading at handsome discounts to book value and low price to earnings ratio of around single digit or low teens value, making them attractive for acquisition or privatisation targets.

“Additionally, the slowdown in the global economy and a likely global recession in 2023 are compelling reasons for companies in the same industry to merge,” he said, adding financially weaker companies would seek strong companies to acquire them.