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This was followed by Temasek Holdings' acquisition of a slice of financial giant Merrill Lynch for US$4.4 billion, announced last month. The next biggest deals were Flextronics International's US$3.15 billion acquisition of Solectron and Dubai Drydocks World's US$1.57 billion buyout of Labroy Marine. Cheap credit and strong market participation by private equity buyers drove the buying spree, according to bankers. While the days of cheap credit are over, strategic buyers and corporations, given the trend of Singapore companies buying abroad, are expected to sustain the M&A momentum this year. Bankers also point to the fact that Temasek is expected to sell its three power generation companies, which should feed the M&A frenzy and top the league table. 'This year will be another standout year for M&A in Singapore,' predicted Mr Edwin Low, Credit Suisse's managing director and head of Singapore investment banking. 'The M&A market will be characterised by larger deals, both in inbound sellside and outbound buyside.' With plenty of money in their coffers, Singapore companies are expected to create more waves abroad, as they continue prowling overseas markets in search of new assets to add to their portfolios. The value of deals involving Singapore companies that acquired foreign assets stood at US$49 billion last year. 'This year will continue to be driven by the need for Singapore corporates to expand beyond the region,' said DBS Bank's head of M&A advisory, Mr Mahesh Rupawalla. 'Companies with strong balance sheets and the ability to raise money will be the ones driving the M&A market,' said JPMorgan's chief executive of investment banking in South-east Asia, Mr Phillip Lee. He added that valuations were also now at attractive levels compared to two years ago, making it a buyers' market for firms planning strategic or value investments.
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