Out­bound M&A bounces back in Q2

China Daily (Hong Kong) - - BUSINESS -

BEI­JING — China’s out­bound merg­ers and ac­qui­si­tions re­bounded in the sec­ond quar­ter of this year with deal value in­creas­ing 148 per­cent quar­ter on quar­ter, ac­cord­ing to an in­dus­trial re­port. Chi­nese in­vestors re­turned to the deal ta­ble in the April-June pe­riod af­ter a luke­warm first quar­ter and were the sec­ond most ac­quis­i­tive cross-bor­der na­tion by value with 94 deals to­tal­ing at $35.9 bil­lion, ac­cord­ing to in­ter­na­tional law firm Baker McKen­zie’s Cross­Bor­der M&A In­dex.

The in­dus­trial sec­tor con­tin­ues to out­rank other sec­tors in terms of China out­bound M&A deal vol­ume while the con­sumer and tech­nol­ogy sec­tors also saw sig­nif­i­cant amounts of out­bound in­vest­ment from China, the re­port showed.

China’s in­bound M&A ac­tiv­i­ties con­tin­ued its up­ward tra­jec­tory, see­ing a 29-per­cent rise in vol­ume to 62 deals and a 69-per­cent rise in value to $13.2 bil­lion from Q1 of 2017.

A sig­nif­i­cant por­tion, 66 per­cent, of the in­bound in­vest­ment value this quar­ter went to the tech­nol­ogy sec­tor, par­tic­u­larly the e-com­merce and soft­ware com­pa­nies, the re­port pointed out.

“It is no sur­prise that the tech­nol­ogy sec­tor is at­tract­ing a sig­nif­i­cant por­tion of the in­bound in­vest­ment. China is al­ready home to a num­ber of lead­ing global dig­i­tal and internet com­pa­nies. It is likely that it will con­tinue to at­tract in­vest­ment and know-how to fur­ther de­velop its high-tech in­dus­tries,” said Tracy Wut, M&A part­ner at Baker McKen­zie’s Hong Kong of­fice.

Wut also pre­dicted a rise in cross-bor­der M&A ac­tiv­i­ties led by Chi­nese com­pa­nies in Belt and Road Ini­tia­tive coun­tries and re­gions.

The in­dus­trial, con­sumer, ser­vice and tech­nol­ogy sec­tors will most likely be the fo­cus for Chi­nese in­vestors, partly re­flect­ing China’s on­go­ing eco­nomic trans­for­ma­tion from be­ing an ex­port and lowend man­u­fac­tur­ing-led econ­omy to a con­sumer-driven and ser­vice-ori­ented na­tion, Wut added.


A vis­i­tor bor­rows an um­brella with Zhima Credit of Ant Fi­nan­cial in Tongx­i­ang, Zhe­jiang prov­ince.

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