2014 Greater China outbound M&A spotlight

Article

More experienced buyers

Higher return expectations

Despite volatility in the international financial markets, Chinese firms are more confident in making outbound mergers and acquisitions (M&A), evidenced by the robust M&A transaction data during the first five months of 2014.

Despite volatility in the international financial markets, Chinese firms are more confident in making outbound mergers and acquisitions (M&A), evidenced by the robust M&A transaction data during the first five months of 2014, according to the Report, which includes a survey of M&A practitioners in the Greater China region.  For the first five months of 2014, there were 106 Chinese Outbound M&A transactions with a total value of US$31.7 billion.  The majority of the surveyed M&A practitioners believe that the number of Chinese outbound M&A transactions will grow as much as 30 percent in the coming year.

Key Highlights:

  • Chinese outbound M&A deal volume was up by 8%, especially in small (up to US$50m) and mega-sized (more than US$1bn) deals reflecting broadening interest in minority stakes and higher value deals in mature markets.
  • Chinese outbound M&A deal value dropped by 10% reflecting a more judicious investor profile with expectations of higher returns.
  • US economic recovery makes US investments attractive while continued recession in the Euro zone provides opportunities for bargain hunters.
  • More Chinese investors engage professional advisors for due diligence, structuring and post-merger integration issues with the hope to realize higher return.

 

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