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Laxman Pai, Opalesque Asia: Notwithstanding the recent slowdown, China's mergers and acquisitions (M&A) potential is expected to remain high in 2022, owing to the Chinese economy's rapid transition and record amounts of dry powder (marketable, "cash-like" securities that are highly liquid) for financial sponsors, said a study.
China M&A transactions continued to surge in terms of both volume and value throughout 2021 and in the first quarter of 2022, according to a report by Dezan Shira & Associates.
"Several government policies and industrial upgrade programs have facilitated this growth, allowing foreign investors to participate in the market," it said.
In 2021, China's M&A activity reached a new high with 12,790 deals closed, up 21 percent from the previous year, though deal prices declined 19 percent to US$637 billion. Private equity (PE) funding for M&A deals was the largest by value for the first time.
97 PE-backed mega-deals were closed, worth more than US$1 billion, many of which corresponded to significant domestic economic objectives, such as industrial upgrade (23 transactions worth US$56 billion), dual circulation (17 deals worth US$31 billion), and environment, sustainability, and governance (ESG) (9 deals worth US$26 billion).
According to recent estimates, despite witnessing 10 megadeals (deal value US$1 billion) in the first quarter of 2022, the country suffered a 12 percent and 9 percent reduction in transaction value in the s...................... To view our full article Click here
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