China M&A deals to remain sluggish in second half amid inflation, weak stocks and property-market distress, PwC says
- Deal value fell to its lowest level in eight years in the first half of 2022, says PwC
- A significant rebound is unlikely, although activity in some segments remains high and there is pent-up demand, according to the consulting company
The economic impact of the pandemic, travel restrictions and geopolitical tensions will continue to chill mergers and acquisitions (M&A) activity in China in the second half of the year, according to industry observers.
“There is little prospect of a significant rebound in the short term,” said David Brown, deals leader for Asia-Pacific at PwC. “However investor sentiment is still strong and activity in certain segments remains high.”
The first half of 2022 saw a total of 6,173 M&A transactions, up 1.1 per cent compared with a year earlier and down 8 per cent compared with the second half of 2021, according to PwC’s M&A midyear outlook report, released on Wednesday.
However, deal value fell to a level last seen in 2014, declining 30 per cent to US$236.7 billion compared with the first half of 2021, the consulting company said.
Inflation, a weak stock market and the distressed property market have inhibited China’s once highly active M&A environment, Brown said.