Mergers & Acquisitions

China leads Asia’s outbound mergers and acquisitions, Mergermarket says

In the first 8 months, Chinese companies signed 173 deals valued at a record US$128.7 billion, 64.3 per cent of total deal value in Asia

PUBLISHED : Thursday, 01 September, 2016, 9:00pm
UPDATED : Thursday, 01 September, 2016, 10:42pm

Chinese companies led Asia’s worldwide mergers and takeovers during the first eight months this year, pushing the number and value of transactions over the 2015 tally, according to data provider Mergermarket.

Companies domiciled in Asia made 479 outbound M&A deals valued at US$200.2 billion as of August 31, more than the 690 deals valued at US$199.6 billion for the whole of 2015, Mergermarket’s data shows.

China’s companies contributed 173 deals valued at US$128.7 billion, a record 64 per cent of the total done, the data shows.

The latest deal was by Zhongwang International’s US$ 2.3 billion acquisition of US aluminium manufacturer Aleris, the biggest purchase of an overseas metals processor by China. Zhongwang is Asia’s biggest producer of extruded aluminium.

Europe was the favourite destination among Chinese companies in mergers and acquisitions.

In the first eight months, Chinese investors took over 101 European companies valued at a combined US$76.5 billion, beating all previous records.

Industrials and chemicals was the most sought-after sector by Asian buyers during the period, followed by technology, energy, mining and utilities, consumer, business services and real estate.

Yiqing Wang, China editor of the Mergermarket, said China’s unstoppable outbound M&A was driven by the country’s effort to seek high-yielding assets overseas, to hedge against slowing domestic growth and deep-pocketed acquirers trying to buy ahead of further currency depreciation.

“Chinese acquirers expanded their reach to almost each sectors especially high tech industrial, and new areas such as gaming, sports and travel/leisure, far beyond their traditional interest in mining resources/energy sector,” she said.