CHINA'S merger and acquisition will slow down from its peak in 2016 this year, as outbound activities may cool for tighter foreign currency regulations and national congress in the second half of 2017, consultancy PwC China said in a report today.
"We think China M&A for 2017 will track close to, perhaps slightly less than, 2016 on an overall basis," said Roger Liu, PwC China Hong Kong Deals Private Equity Leader. "Time taken for foreign currency approval is proving problematic in some transactions, while some sectors, such as real-estate, minority stakes and anything considered 'non-strategic', will be hit more than others."
China's outbound acquisition activities soaring 246 percent by value to US$221 billion in the year of 2016, marking a record level both in terms of deal values and deal numbers, according to the consulting firm.
China National Chemical Corporation was the largest buyer on overseas assets among which, as the company signed US$43 billion worth of mega-merger to acquire the Swiss-based agrochemicals and seeds producer Syngenta AG in October.
North America was the second most popular region for Chinese acquirers last year, again the highest total on record. North American deals focused on media and hospitality companies, such as Dalian Wanda's acquisition of Legendary Entertainment for US$3.5 billion, and Anbang Insurance's $6.5 billion purchase of Strategic Hotels And Resorts.
But such trend will likely cool down with a slow effect after central bank's recent attempt to control capital outflows by stabilizing yuan and tighten the currency exchanges to overseas, Liu said.