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M&A to keep growing, PwC says

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Mergers and acquisitions activity involving Chinese companies should continue to rise this year amid economic growth at home and buying opportunities abroad, PricewaterhouseCoopers said yesterday.

Chinese firms would be particularly keen to buy companies and other assets overseas this year as global uncertainties presented good investments, particularly in Europe.

The global auditing firm expects there will be double-digit growth in outbound activity. In 2011, the number of outbound acquisitions increased by 10 per cent to 207, while the value of such deals rose 12 per cent to a US$42.9 billion.

Outbound deals in the industrial and consumer sectors grew rapidly, making up 35 per cent of the number of overseas acquisitions last year, up from 22 per cent in 2010. Resources and energy deals make up 42 per cent of the number of overseas acquisitions and 83 per cent of deal value.

David Brown, Greater China private equity group leader at PwC, said outbound acquisitions in the industrial and consumer sectors would outpace growth in the energy and resources sector this year. 'China is moving from low-cost manufacturing to high value-added, high technology,' he said. 'It needs to acquire technologies, know-how, intellectual property and consumer brands.'

Europe emerged as an important destination for acquisitions last year, with the number of deals jumping 76 per cent to 44, making it the third most popular destination behind Asia and North America.

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