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January 17, 2011

M&A deals hit record high in China

The number and value of M&As in China hit
a record high in 2010, according to PwC China.

The value of deals increased by 16% to $200
billion over 2009 figures and the number of transactions rose 27%
to 4,251.

Outbound M&A activity is particularly
strong as Chinese companies look at targets in the US, Europe,
Australia, Africa and Asia. The number of outbound deals involving
Chinese companies grew by more than 30% to 188 with a combined
value of about $38 billion.

PwC Greater China private equity group leader
David Brown said there is strong interest among Chinese companies
to acquire natural resource businesses, high technology companies,
machinery and equipment manufacturers and the automotive
sector.

Private equity boom

Private Equity (PE) is an important source of
capital for private enterprises in China. Nearly 580 transactions
involved PE activity, an increase of 66%.

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PwC expects more growth in outbound M&A
deal activity in 2011, driven by the demand for natural resources
as well as a thirst for technologies to bring back to the China
market.

Within China, M&A deals are dominated by
domestic transactions, which grew 6% to 2,947 deals in 2010. Their
value increased by 41% to $131 billion.

Foreign investment is also increasing with
inbound M&A activity growing by 32% to pre-financial crisis
levels.

 

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