Macroscope | How China’s mergers and acquisitions abroad are shifting amid headwinds
- Chinese deals have dropped to a 17-year low in the US as M&A shift towards the rest of Asia, Middle East and elsewhere
- While deals have dipped overall, there are reasons to be optimistic about the second half of the year, such as in the life sciences
This heightened regulatory environment has pushed China to pivot its investments from the historically attractive markets of the United States and Europe towards other parts of Asia and the Middle East. As a result, Chinese M&A activity in the US has dropped to its lowest in 17 years, with just US$221 million invested so far this year, compared to US$3.4 billion for the same time last year, according to data from Dealogic.
Activity on Datasite’s platform shows this, too, with China deals down 23 per cent year on year in the first seven months of the year, led by fewer consumer, tech, media and telecoms, and industrial deals. By contrast, M&A activity in the Asia-Pacific is up by 42 per cent year on year.
The drastic dip in Chinese cross-border M&A activity isn’t attributable to the US alone. Chinese deals in Germany total just US$189 million so far this year, the lowest in more than a decade, according to Dealogic. Activity in the United Kingdom and Australia are also down, at just US$503 million and US$228 million respectively.