China's M&A deal values hit record high of US$260b in 2013
Deal values surged by 28%.
According to PwC, China merger and acquisitions (M&A) deal values reached a record high in 2013 growing by 28% to US$260 billion, with 43 deals greater than US$1 billion compared to 30 deals in 2012.
Deal numbers recovered strongly in the second half of 2013 from multi-year lows in the first six months, increasing by more than 40% in the second half. In this period, nearly all categories of M&A showed sustained growth.
“Strong M&A activity shows a return of market confidence and we expect these strong growth trends to continue into the first half of 2014,” says David Brown, PwC China and Hong Kong Transaction Services Leader.
“Key drivers to fuel M&A growth will include further liberalisation of markets, state-owned enterprise (SOE) reforms, government support for M&A – especially outbound, and recovering equity capital markets. A-share listed companies will also be important players, driving consolidation in many industry sectors.”Strategic buyers return
China domestic strategic M&A activity also recovered well in the second half of 2013 although full year numbers were less spectacular due to a slow first half largely due to political and economic uncertainties.
However, foreign inbound M&A was flat, with marked declines in buyers from Japan and the US.
“We do think that foreign inbound investment will grow as confidence returns in overseas markets especially in Europe and the US, and as MNC’s realign their China strategies resulting in both sale and purchase of business units and an increasing number of JVs with Chinese partners,” adds Mr Brown.