China M&A
A lot to buy (or sell)?

China M&A: correlation with macro and market

At US$30 bn p.a., the current level of China/Hong Kong M&A activity is still only 2% of the global total but its market share is rising steadily. The level of activity has little relationship with macro cycles, but is positively correlated with Chinese and global equity market performance.

International M&A: resources, technology, brand and market

The US is the largest acquirer and target country for China/Hong Kong M&A – a net positive balance of US$4.7 bn (more acquisitions by US firms than the other way round), or 67% of the global balance. Chinese industries receiving most overseas interest are financials, cosmetics & personal care, and beverages – all targeting Chinese consumers. Overseas industries receiving most Chinese buying interest are computers, retail and oil & gas, mainly for vertical integration, resources and technology.

Domestic M&A: focus on industry consolidation

Domestic M&A is most active in sectors that are very fragmented, requiring consolidation. It is not easy in China, despite the central government’s efforts to consolidate many of these industries.

Sector outlook and ‘national champions’

In this report, we analyse the key M&A dynamics in 15 sectors and provide a brief profile of 22 Chinese ‘national champions’ which are set to emerge on the global stage in coming years.