The great haul of China continues apace as Chinese outbound M&A reaches new heights. Will it continue, or are cracks beginning to appear? David Prosser reports.
Global M&A activity in 2016 may have slowed as anxieties about the world economy and political uncertainties have come to the fore. But nothing could be further from the truth when it comes to China. The country’scompanies agreed $121.1bn worth of cross-border deals during the first half of the year – and by the middle of September the total had climbed to $142.6bn. This already dwarfed last year’s figures, which at $115.5bn represented a record year.
Chinese companies accounted for 21% of all international cross-border M&A during the first half of 2016. Led by government-linked enterprises such as ChemChina – which agreed to pay $44.6bn for Swiss chemicals company Syngenta in February – Chinese acquirers have swooped on a broad range of sectors. Once upon a time, Chinese acquirers concentrated on natural resources or technology (accounting for $26bn worth of deals in the first half), but now consumerfacing industries and healthcare are on their radars.
While Chinese businesses no doubt remain acquisition targets, inbound M&A is down this year compared with 2015. In the first eight-and-a-half months of the year, international buyers committed $28.8bn to 502 Chinese acquisitions, according to Thomson Reuters – well off the $43.8bn during the same period of last year, which came from 500 transactions.
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