China's cash-rich corporations are twice as keen as their overseas counterparts to pounce on merger-and-acquisition opportunities thrown up by the euro-zone debt crisis, according to an international survey.
But the mainland firms surveyed believe most assets are still overpriced and their price tags could fall in the next year.
Accounting firm Ernst and Young polled 1,500 executives from 57 countries in February and March, 85 of them from China. Overall, 22 per cent said they would take up M&A opportunities in light of Europe's currency crisis, compared to the 42 per cent of Chinese executives who said they would.
Bernard Poon, an Ernst and Young managing director, said the strong liquidity and low debt levels of mainland companies were two big reasons for the difference.
According to the survey, 74 per cent of the Chinese respondents said cash would be their main kind of transaction funding, and 70 per cent said they would not need to borrow at all to finance an acquisition.
That compares to just 43 per cent of all respondents who said they would rely on cash for financing, and 26 per cent who would not need a loan. Among all respondents, 39 per cent said they would need to borrow to fund such a deal.
Ernst and Young partner Judy Tsang, who oversees M&A transactions for the firm, said many mainland firms were interested in buying European companies, especially ones involved in mining, cars and new energy.