Chinese Cross-Border Deal Value Jumps 85% During First Half

Chinese companies’ cross border deal value reached US$50.2 billion during the first half of the year, an 85% increase from the US$27.1 billion recorded in the same period last year, according to data released by Thomson Reuters.

Chinese companies’ outbound deal activity saw greater increase, with deal value at US$36.3 billion, an 111% increase from US$17.2 billion in the first half of 2012.

The value of all merger and acquisition deals involving Chinese companies hit US$116.3 billion, a healthy 39% increase.

Continuing a trend from the past, energy and power were still the most active sector for Chinese companies. Deal value in the sector reached US$25.7 billion, taking a 22% share of all Chinese M&A deals. Industrial sector came in next with deal value hitting US$16.1 billion, a 14% share.

Though Chinese companies are becoming more acquisitive, M&A activity in Asia suffered a slight drawback during the first half. Deal value with Asian companies’ involvement reached US$195.2 billion, a 3% decrease from US$201 billion recorded in the same period last year.

Similarly, companies in the energy and power sector were the most targeted with 282 deals and US$35 billion in deal value. Industrial sector followed, accruing US$26.7 billion. Consumers trailed close behind, with US$26 billion.

With less deals happening in the region, investment banks are generating less fee income. Fees earned for the region were estimated at US$1.1 billion, a 5.5% decrease from the estimated totals recorded last year.

The top earner was Goldman Sachs & Co with US$109.8 million, followed by Citi with US$74.4 million. Morgan Stanley earned came in third, earning US$56.3 million.

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