China Inked $40.7B Outbound M&A Deals In Second Quarter

China inked 97 outbound M&A deals worth US$40.7 billion during the second quarter, 23% and 132% higher than the same period in 2015, according to a new report issued by Baker & McKenzie.

The focus of China’s outbound investments was on technology and industrials. The former saw 15 deals worth US$17 billion, and the latter witnessed 17 deals worth US$4.8 billion during the second quarter.

The growing importance of Chinese outbound M&A is highlighted by the fact that Chinese M&A accounted for 6% of the global total during the last quarter, up from only 1.1% five years ago.

"We continue to see activity from Chinese buyers shine in this turbulent market," says Michael DeFranco, chair of Baker & McKenzie’s Global M&A Practice. "I suspect that Chinese outbound M&A will be a driving factor for M&A in the year ahead."

But globally, economic and political uncertainty has continued to slowdown cross-border M&A activity, with 1,320 cross-border deals worth US$214 billion announced in the second quarter, a 4% drop in volume and a 45% drop in value year-on-year.

In addition, the total value of cross-border megadeals – those above US$5 billion in value – fell significantly in the first half of the year.

While there were 21 megadeals struck in the first half of 2015 with a total value of US$296 billion, the 18 thus far in 2016 are worth 23% less at US$228 billion, and only three of those occurred in the second quarter.

North America was the largest cross-regional outbound market by volume, with 263 outbound deals worth US$38.5 billion and 67% of those targeting the European Union.

Asia Pacific, while not as acquisitive with 188 deals, spent US$50.5 billion on cross-regional deals. Its main target was also the European Union, spending US$29 billion across 96 deals.

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Katherine primarily maintains our exclusive DealShot service. Culled from thousands of online data points, our China Money AI gathers data, and then Katherine fills in the "last mile" to make sure the data is accurate for our clients who rely on this critical deal flow data.