Outbound deals drive China M&A

Chinese M&A has continued to grow through 2011, recording strong increases across outbound and domestic M&A.

Research, published by investment bank Baird, shows that outbound M&A has led the way posting a 41 per cent increase over year-to-date 2010.

Total deal count rose from 1,297 to 1,390 over the same period with the number of big ticket £1 billion plus transactions growing by 50 per cent.

Anthony Siu, managing director and head of Asia investment banking at Baird, says: ‘The robustness of the Chinese economy is clearly demonstrated by the growing power of Chinese buyers and their desire to seek a broader footprint through acquisitions.’

Speaking to Mandadeals in February, Siu said that he believed that China would become an increasingly important participant in cross-border M&A.

The Chinese government’s ‘going out’ strategy, which supports companies looking to invest overseas, has seen outbound M&A build on a solid 2010 showing, with 2011 on course to post record results after doubling values over the year-to-date period.

Commenting on the recent findings, Siu adds: ‘The rapid uptick in the outbound figures was driven by greater optimism, as domestic growth remained well above official goals, combined with relatively attractive valuations for targets.’

Computers and electronics was the leading sector, with the number of M&A transactions during the period representing almost double that of the second placed sector, real estate and property.

Australia and the US led the way for outbound M&A targets with the UK acquisitions recording 26 through 2011. The largest deal involving a UK target was the June purchase of The Rank Group by Guoco Group for $1.16 billion.

Todd Cardy

Todd Cardy

Todd was Editor of GrowthBusiness.co.uk between 2010 and 2011 as well as being responsible for publishing our digital and printed magazines focusing on private equity and venture capital.

Related Topics

Early Stage Funding