Analysts forecast record year for M&As

China's overseas purchases have gotten off to a roaring start in just a few months and are expected to help boost the world economy

The combined value of China's outbound mergers and acquisitions is expected to set a record this year and be more diversified, according to academicians and industry analysts.

Already, in the first two months of the year, high-profile investments have been made by Chinese companies.

A vibrant M&A push by Chinese companies also would boost the world economy, which is facing great hurdles, says Xing Houyuan, deputy director of the Chinese Academy of International Trade and Economic Cooperation, a Ministry of Commerce think tank.

"The worldwide economic slowdown and the change of landscape in the global industry chain offer great opportunities for Chinese companies to purchase overseas assets that they deem valuable," Xing says.

"Any industry could be a target for Chinese companies today," she says, adding that many records - including total amount spent on outbound M&As - are likely to be broken.

The comments came after a number of state-owned enterprises and private companies struck multibillion-dollar deals in areas ranging from the Internet and agriculture to consumer electronics and finance.

A Chinese consortium led by Beijing-based online security company Qihoo 360 Technology Co recently bid $1.2 billion in cash for Norwegian Web browser developer Opera Software ASA.

Just before that, state-owned chemical company China National Chemical Corp, or ChemChina, said it would buy Swiss pesticide and seeds giant Syngenta for $43 billion. The deal was the largest overseas acquisition by a Chinese company.

Ren Jianxin, chairman of ChemChina, says the takeover will help Syngenta build a presence in China, whose farmlands feed more than 1.3 billion people a year.

On Feb 5, a group of Chinese investors led by Chongqing Casin Enterprise Group agreed to purchase the 134-year-old Chicago Stock Exchange for an undisclosed amount. It was the first United States stock exchange to be purchased by Chinese companies.

In late January, Shandong-based household appliances multinational Haier Group agreed to buy General Electric's appliances business for $5.4 billion in cash. A few days earlier, privately owned conglomerate Wanda Group said it would buy Hollywood filmmaker Legendary Entertainment for $3.5 billion.

Chinese companies announced a record 598 overseas M&A deals last year, worth more than $112 billion, according to Dealogic, a financial technology and support company.

Less than two months into 2016, Chinese companies already have spent roughly $55 billion on outbound M&As, according to public statistics compiled by China Daily.

Carol Wu, transaction services partner of PricewaterhouseCoopers China, says that, as the Chinese government has taken a more active role in facilitating outbound investment, Chinese outbound M&A activities have continued to grow in size and number of deals.

Zhong Nan contributed to this story.

gaoyuan@chinadaily.com.cn

(China Daily European Weekly 02/26/2016 page28)