Europe top destination for China’s overseas M& A deals in Q1

Europe was the top destination for China’s overseas merger and acquisition ( M& A) deals by both value and volume in the first quarter this year, after falling behind Asia for three consecutive quarters, according to a new report by consulting firm Ernst & Young.

Europe and Asia were the most popular destinations for China’s overseas M& A deals in the first three months of 2022, accounting for more than 70 percent of the total.

The deal value in Europe reached $ 2.13 billion, down 74 percent year- on- year, while deal volume was down by 20 percent.

By value, the investments were made mainly in Germany, Italy and the Netherlands, and in the healthcare and life sciences sector, the technology, media, and telecom ( TMT) industry, and financial services, data from the report showed on Wednesday.

Investments in Asia, totaling $ 2.11 billion, were made mainly in India, Singapore and South Korea.

Benefiting from the steady and persistent progress of the Belt and Road Initiative ( BRI), and increased demand for regional supply chain optimization under the Regional Comprehensive Economic Partnership ( RCEP), the world’s largest free trade deal, Asia is expected to continue to be a key region for China’s outbound investment, according to the report.

China’s outbound direct investment ( ODI) rose 7.9 percent in the first quarter from a year earlier to reach $ 34.29 billion, data from the Ministry of Commerce showed.

Non- financial direct investment in countries along the BRI routes reached $ 5.26 billion, up 19 percent year- on- year, accounting for 19.5 percent of the total in the first quarter, an increase of 1.7 percentage points compared with the same period of the previous year.

Affected by both COVID- 19 flare- ups and international complex conditions, the announced China overseas M& A value stood at $ 5.9 billion, a drop of 65 percent on a yearly basis and hitting a record single- quarter low, according to the EY report.