Asia-Pacific region.

King & Wood Mallesons held onto the top spot as the leading legal adviser for mergers and acquisitions so far this year in the Asia-Pacific, according to data compiled by Mergermarket, as the U.S.-China trade war slowed down M&A activity to its lowest level since 2013.

Only Indian firm Shardul Amarchand Mangaldas and Herbert Smith Freehills stayed in the top 10 in the Asia-Pacific, excluding Japan, by deal value, compared to the same period last year.

There were 1,525 deals in Asia-Pacific, excluding Japan, with a combined value of $241 billion in the first half of 2019, according to Mergermarket, down from $370 billion from 1,850 deals in the same period last year.

The slowdown in regional M&A activity was chiefly caused by a downturn in China, where deal value dropped 45% year over year. For more than a year now, the country has been in trade disputes with the U.S., where deal count also dropped year over year, albeit by just 21% to 2,530, while deal value actually rose by 15% to $957.3 billion.

"Clients are unable to make decisions because there is no predictability," Stephen Kho, a Washington, D.C.-based international trade partner at Akin Gump Strauss Hauer & Feld, told The Asian Lawyer in May after U.S. President Donald Trump suddenly threatened to raise tariffs from 10% to 25% on an additional $200 billion worth of Chinese imports. Last week at the Group of 20 summit meeting in Japan, Trump promised to hold off on his 25% tariff threat and agreed with Chinese President Xi Jinping to resume trade talks.

Still, the first half of 2019 saw Chinese firm Zhong Lun Law Firm jump up the M&A league table by value to fifth from 30th in the first half last year, though largely because of its role as Chinese counsel to the acquisitive Japanese conglomerate SoftBank Group Corp. on a $2 billion investment in the New York-based co-working company WeWork Cos. Inc. in January and a $1.5 billion investment in the Chinese used car trading platform Guazi.com Inc. in March. King & Wood Mallesons, the Sino-Australian firm that focuses on major economic plans by the Chinese government, also kept its top spot.

M&A activity in India also decreased, to $33.5 billion – a 53% year-over-year drop. The first quarter was slow in India as businesses were cautious ahead of the general elections, Mergermarket's report said; the elections started on April for six weeks and ended with Prime Minister Narendra Modi holding onto his seat for another five-year term.

While southeast Asia saw fewer deals compared to the first half of last year, total deal value rose thanks to Singaporean developer CapitaLand Ltd.'s $8.7 billion acquisition of logistics and industrial assets from Singaporean sovereign wealth fund Temasek Holdings Pte. Ltd.'s real estate developer arm Ascendas-Singbridge Pte. Ltd.; WongPartnership advised CapitaLand while Allen & Gledhill acted for Ascendas-Singbridge. The deal helped Allen & Gledhill jump up the first half of 2019 M&A league table by value to fourth from 17th the same period last year.

Meanwhile, Japanese M&A activity increased slightly year over year by 2.4% to $18.1 billion, led by SoftBank. In addition to its investments in WeWork and Guazi, the Japanese conglomerate increased its stake in search engine Yahoo Japan Corp. by investing $4.2 billion in May – the largest Japanese deal in the first half of 2019, according to Mergermarket.

Not surprisingly, Japan's Big Four law firms – Nishimura & Asahi, Mori Hamada & Matsumoto, Nagashima Ohno & Tsunematsu and Anderson Mori & Tomotsune – and Morrison & Foerster, which is one of the largest international firms in Japan, took the top five spots in the league table by deal value.

Japanese outbound activity declined 59% in value year over year to $42.6 billion from 160 deals, largely because of Japanese pharmaceutical giant Takeda Pharmaceutical Co.'s $78.2 billion takeover of Irish drugmaker Shire Plc. the previous year – the largest M&A deal globally in 2018. In the first half of 2017 and 2016, Japanese outbound M&A was $33 billion and $16.9 billion, respectively

Despite the drop, Japan's half-yearly outbound value again surpassed China's $21.5 billion for the third straight time. With the U.S.-China trade war expected to continue for some time, Japanese companies will have more opportunities for deals as there will be less competition from Chinese counterparts, the Mergermarket report said.

"With little signs of reaching a deal to end the trade war and negotiations constantly falling apart between [China and the U.S.], the outbound activities led by Japanese bidders are expected to remain strong in [the second half of 2019]," said the report.

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