Greater China 2014 outbound M&A report

The 2014 Greater China outbound M&A report covers key trends in outbound Chinese M&A and greenfield FDI transactions from Greater China.

The report shows major findings from an online survey conducted in May 2014, which recorded 100 respondents from Chinese state-owned enterprises, privately-owned enterprises, private equity houses, investment banks and law firms on their views and expectations of Chinese outbound M&A transactions in 2014.

Historical Mergermarket and fDi Markts data from 2005-2014 is also used to provide a comprehensive picture.

Key findings on 2014 activity:

• Chinese outbound investment activity was 24 percent higher in the first five months of 2014 than in the same period in 2013, in value terms (M&A and greenfield combined).
• The value of overseas Chinese M&A investments was higher in 2014 than greenfield investments
• The number of both small and mega-sized deals grew
• The majority of Chinese outbound M&A deals were made in Western Europe and the majority of greenfield investments were made in the US
• Chinese investors focused on acquiring consumer business assets

Looking forward to 2015:

• The number of Chinese outbound M&A transactions is expected to grow
• Internationalisation of the RMB and the positive outlook for economic growth in the US may create a favourable environment for Chinese outbound investments

Reforms that eased regulations on outbound capital transfers and internationalization of Chinese currency may create a favorable environment for Chinese outbound investments.

Chinese investors are broadening their interest in minority stakes and higher value deals in mature markets. With more years of experience in investing overseas, they are becoming more confident and assertive in outbound M&A, with also a higher expectation for investment returns. Against this background, the deal volume of larger deals may grow at a slower rate, reflecting their more judicious investor profile.