China's Listed Companies Become the Driving Force as Overseas M&A Double, Says PwC
Yicai Global
/SOURCE : Yicai
China's Listed Companies Become the Driving Force as Overseas M&A Double, Says PwC

(Yicai Global) Oct. 21 -- So far this year, the number of overseas mergers and acquisitions of Chinese mainland enterprises reached a record of 671, almost twice the year-round trading volume of last year, with a total amount of more than USD160 billion, a Price Waterhouse Coopers report found.

During the first three quarters of this year, several mainland Chinese mainland enterprises were focusing on overseas investment with listed companies continuing to make up the bulk of the group engaged in foreign mergers and acquisitions.

"The overall growth trend is not only set to rise in the short term, but also become the norm. More companies are seeking overseas acquisitions to hedge against the fluctuations of the CNY exchange rate, while gaining stable cash flow of foreign currency through mergers, Mr. Tang Xun, partner at PwC's Chinese business mergers and acquisitions services, told Yicai Global.

Private enterprises' overseas mergers and acquisitions tend to be more about acquiring advanced technologies, management experience, talents, brands, services and overseas market shares, focusing on media and entertainment business, high-end manufacturing, consumer goods businesses with a good brand, supply chains and customer resources, Mr. Tang added.

State-owned enterprises are still more interested in energy, minerals and other traditional resource projects, but they have been also active in investing in agri-business, health care, environmental protection and other industries, Mr. Tang said.

Those overseas mergers and acquisitions targeted at the financial investment sector have been remarkably more active. In the first three quarters, the number of Chinese companies acquiring financial investment enterprises has more than doubled increasing from 56 in 2015 to 127 by this year.

In terms of investment, real estate is the financial investors' first choice for overseas mergers and acquisitions, with funds totaling (USD8.3 billion). This is followed by industry (USD7.7 billion), high tech (USD4.1 billion), entertainment media (USD3.9 billion) and health care (USD1.3 billion), according to PwC's report.

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