Chinese mergers, purchases at record high level

Chinese mergers and acquisitions in the UK reached a record high this year, according to a new study.

The report by Cass Business School, which is part of City, University of London, found that the first half of the year saw 23 such deals involving Chinese buyers, worth a total of $3.3 billion.

The M&A experts who authored the report, Zhu Lin and Scott Moeller, noted that the boom began in late 2015, following the visit of President Xi Jinping that October. They said that, as a result of the visit,"Sino-British relations were elevated to new heights in politics and business".

"Whenever a leader of a country visits another, there tends to be a boost in trade deals," Moeller told China Daily.

The research was based on data compiled from a sample of 44 UK acquisitions by Chinese publicly-listed companies, with deals worth more than $5 million.

Despite concerns about the British vote to leave the European Union, activity continued to boom, even after the Brexit decision, with five deals announced by Chinese acquirers. These included Dalian Wanda Group's bid of $1.2 billion for Odeon & UCI Cinemas.

The report said the deals might be an indication that Chinese investment in the UK remained resilient, "with new opportunities continuing to be pursued despite-or perhaps because of－the turmoil in the UK markets post-Brexit".

The study also highlighted the fact that Chinese companies had bucked the trend that usually sees acquiring companies lose share value when deals are announced.

It found Chinese companies that bought UK businesses saw a significant rise in the value of their shares.

Moeller said: "This research breaks new ground because it focuses on the performance of Chinese acquirers in the UK, a relatively recent phenomenon."

The report said the volume and value of Chinese investment into the UK was "remarkably steady".

The consumer and real estate sectors accounted for almost three-fourths of deal value, while industry and the financial sector together accounted for 15 percent.