Takeover talk – service companies next in line

Financial Journalist
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Key points

  • Middle-class consumers in Asia-Pacific are forecast to rise to 3.2 billion in 2030 (from half a billion in 2009).
  • Australian and offshore companies will find it easier to buy smaller companies in the region than build a presence from scratch.
  • This will make companies like Australia Agricultural Company and Monash IVF targets.

 

Takeover targets usually fall into two camps: beaten-up, undervalued or mismanaged stocks, and those swept up in industry rationalisation. Watch for a third category to emerge next year: acquisitions of service companies with a foothold in Asia.

Free-trade agreements with South Korea, Japan and an imminent deal with China are expanding Asian markets for Australian business – possibly more than investors realise. They are also putting a blowtorch on companies that have been slow to expand in the region.

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