BEIJING, Jan. 15 (Xinhua) -- China saw record levels of mergers and acquisitions (M&A) activities both in terms of deal values and the volume of transactions in 2016, said a report released by PwC in Hong Kong on January 12.
The report said the growth in the number of transactions was largely driven by financial buyer activity and a 142 percent jump in outbound M&A, and both categories reached new record highs.
In value terms, China’s outbound M&A grew by an astounding 246 percent to reach 221 billion U.S. dollars, nearly 3.5 times the previous record set at the end of 2015.
There were 51 outbound transactions valued at over 1 billion dollars, more than double the previous record. The largest one is China National Chemical Corporation acquiring Syngenta Ag for 43 billion dollars.
The most popular investment destinations of Chinese investors were Europe, followed by the United States and Asia, with the recorded numbers of transactions respectively staying at 300, 265 and 219.
Looking forward, the report predicts that China’s M&A activities in 2017 will track 2016 closely, with perhaps even a small decline.
Gabriel Wong, head of China Corporate Finance at PwC, said this is partly due to the depreciation of the RMB and the new regulations’ effects on foreign currency approval.
However, the report argues that outbound investment that is considered to be strategic in nature will continue to be encouraged, such as new energies and environmental protection. Regulators will continue to scrutinize sectors that are considered non-strategic or where valuations have become very high, such as real estate, retailing and entertainment.
The other drivers for this activity will remain in place over the medium to long term, including over capacity in some traditional industries and economic restructuring. Consequently, PwC believes that outbound M&A will continue to reach new records in 2018.
Enditem (Edited by Yang Qi, kateqiyang@xinhua.org)
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