Business / Economy

Record year expected for M&As

By Gao Yuan (China Daily) Updated: 2016-02-16 01:38

The combined value of China's outbound mergers and acquisitions is expected to set a record this year and be more diversified, according to an academician and industry analysts, as Chinese companies from various sectors place high-profile investments in the first two months of 2016.

A vibrant M&A desire from Chinese companies will also boost the world economy, which is facing great hurdles to recovery, said Xing Houyuan, deputy director of the Chinese Academy of International Trade and Economic Cooperation, a think tank under the Ministry of Commerce.

“The worldwide economic slowdown and change of landscape in the global industry chain offers a great opportunity for Chinese companies to purchase overseas assets that they deem valuable,” Xing said.

“Any industry could be a target for Chinese companies today,” she said, adding that many records — including that for total expenses in outbound M&As — will 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.

On Wednesday, a Chinese consortium led by Beijing-based online security company Qihoo 360 Technology Co bid $1.2 billion in cash to purchase Norwegian Web-browser developer Opera Software ASA.

A week before the takeover, on Feb 3, State-owned chemical company China National Chemical Corp, or ChemChina, said it will 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, said the takeover will help Syngenta to build a presence in China, whose farmlands feed more than 1.3 billion people each 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 will buy Hollywood filmmaker Legendary Entertainment for $3.5 billion.

Chinese companies announced a record high 598 overseas M&A deals last year, worth more than $112 billion, according to Dealogic, a financial platform provider.

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, said 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.

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