China's M&A Activity in Europe Surged 58% in First Three Quarters, EY Report Finds
Xu Huiyun
DATE:  Nov 01 2018
/ SOURCE:  Yicai
China's M&A Activity in Europe Surged 58% in First Three Quarters, EY Report Finds China's M&A Activity in Europe Surged 58% in First Three Quarters, EY Report Finds

(Yicai Global) Nov. 1 -- Europe remains the most popular target region for China's overseas mergers and acquisitions in terms of total deal value, states a new report from major professional services firm Ernst & Young. Total M&A investment in the region expanded 58.2 percent annually to USD60.8 billion in the first nine months of the year.

China's overseas non-financial direct investment maintained steady development despite the global geopolitical uncertainty this year, the report states. Regulatory initiatives have also brought an end to deals in the real estate, sports and entertainment sectors for Chinese investors.

M&A transactions in Oceania have also grown rapidly, becoming a bright spot in the first three quarters. Chinese investment in the region nearly tripled to USD21.8 billion for the first nine months, with 62 deals announced, up 8.8 percent on last year.

The total value of transactions in Asia, North America and South America decreased by more than one-third over the period.

In total, Chinese investors conducted non-financial direct investments in 4,597 overseas firms spanning some 155 countries and regions in the first period, data from the country's commerce ministry shows. Accumulated investment rose 5.1 percent over last year to USD82 billion.

The above overseas investments are mainly concentrated in leasing and business services, manufacturing, mining, wholesale and retailing, accounting for 32.8 percent, 16.7 percent, 9.7 percent and 9.2 percent, respectively.

Chinese enterprises' non-financial direct investment in the Belt and Road countries rose 12.3 percent to USD10.8 billion, outstripping total growth. Turnover from foreign contracted projects in B&R countries rose 18.4 percent to USD58.5 billion. Investment in the construction of overseas economic & trade cooperation zones increased USD4.1 billion, creating an output value of USD14.3 billion, with USD490 million paid in taxes and fees to host countries.

The electricity and utilities, oil and gas, and consumer goods sectors made up close to two-thirds of the overseas Chinese investment volume in the first three quarters, according to the EY reports. They accounted for 29 percent, 18 percent and 12 percent, respectively. Deals in in power and utilities, as well as oil and gas expanded close to four-fold in the period.

In terms of the number of overseas investment deals, technology, media and telecoms came out on top with 138 cases, followed by consumer goods and financial services, with 138 cases and 110 cases, respectively. These three sectors made up 57 percent of the total number of deals.

Editor: William Clegg


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Keywords:   Overseas,Merger & Acquisition,Ernst & Young