(Yicai Global) Feb. 24 -- Mergers and acquisitions in China fell 20 percent by value last year to USD485.8 billion, the lowest since 2014, due to the impact of Covid-19 and global geopolitical issues, according to auditors PricewaterhouseCoopers.

Private equity deals accounted for more than half of all the M&As done in China for a second year in a row, despite slipping 23 percent from 2021, London-based PwC said in a report published yesterday.

The number of M&As worth more than USD1 billion tumbled 44 percent to 54, with 35 related to the shakeup of Chinese state-owned enterprises, the report said.

The ability and confidence of Chinese businesses to go for big overseas mergers and acquisitions was impacted by travel restrictions and geopolitical issues during the Covid-19 pandemic, PwC noted. Changes in the US regulatory environment also made it difficult for private equity to cash out through initial public offerings, the report noted.

China M&As may bounce back this year as the country re-opens after the pandemic, said Andrew Li, transaction and advisory services leader at PwC Central China. But the value will be near the same level as last year, with a weaker first half and a stronger second, as the market recovery will be gradual and investors will stay cautious, he added.

In the short run, China M&As will remain domestically orientated, Li noted, adding that overseas deals will surge later on, with the Asia-Pacific and Middle East the preferred regions.

Editors: Dou Shicong, Martin Kadiev