China’s open borders and push to stoke economy may revive deal-making, advisers say

Outbound M&A involving companies in China halved last year to the lowest point since 2006, according to Refinitiv

Sectors linked to strengthening China’s economic prospects will be at the centre of deal making this year, advisers say

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Chinese consumer, retail and travel-related firms are expected to bounce back after an almost three-year lockdown. Photo: Reuters

Published: 3:25pm, 26 Jan 2023Updated: 3:29pm, 26 Jan 2023

China’s reopened borders and renewed focus on boosting the sagging economy have brightened the deals outlook, with bankers starting to field interest for mergers, acquisitions and fundraising involving the world’s second-largest economy.

The prospect of a revival in deals comes as Chinese policymakers try to restore private-sector confidence and growth, which has been ravaged by the Covid-19 pandemic and a sweeping regulatory crackdown.

Although consumer, retail and travel-related firms are expected to bounce back after an almost three-year lockdown, advisers say sectors linked to strengthening China’s economic prospects will be at the centre of deal making this year.

“We see strategic sectors, hardcore industrial technology, automation, semiconductor-related to be a focus for outbound activity,” said Mark Webster, partner and head of Singapore at BDA Partners, an Asia-focused investment banking adviser.

A joint venture between China’s Tianqi Lithium and Australia’s IGO are bidding for lithium miner Essential Metals. Photo: Shutterstock

“Healthcare opportunities are proving of interest, both domestically and outbound, including in Southeast Asia,” he added. “Geographically, Indonesia in particular is attracting a lot of attention.”