Chinese M&A activity increases five-fold, focusses on tech and consumption

BEIJING - China’s outbound mergers and acquisitions reached US$96 billion in the first four months of 2016, substantially exceeding the total 2015 transaction volume of US$59 billion and representing more than a fivefold increase from the first four months of last year, according to a report released by JPMorgan Chase & Co.

 Making a big contribution to the surge was China National Chemical Corp’s planned US$46.4 billion acquisition of Swiss pesticide giant Syngenta AG. China’s total M&A transaction volume nearly tripled from US$259 billion in 2013 to US$735 billion in 2015, accounting for half of the Asia-Pacific M&A volume and 15% of global volume last year, according to the report.

Other key drivers behind the growth included a shift in the Chinese economy from export-driven manufacturing to one driven by technology, industrial know-how and consumption. The report found that China’s outbound M&A priorities evolved to focus on technology and consumption-focused sectors.

Brian Gu, co-head of M&A Asia Pacific at JP Morgan, said: “Most of the Chinese buyers have a strategic goal for their outbound acquisitions. The China M&A market has seen the emergence of experienced acquirers. They have become more confident in their ability to fund, execute and integrate multibillion-dollar deals.”  www.webershandwick.cn (ATI).