Mixed M&A picture for SOEs and private firms
Print Edition
CHINESE state-owned enterprises posted their first year-on-year drop in the value of outbound mergers and acquisitions in the first three quarters of 2014 while private companies more than doubled theirs during the same period, PricewaterhouseCoopers said in a report yesterday.
Between January and September, the value of M&As by SOEs dropped 37 percent to US$23.1 billion, while those made by private companies soared over 120 percent to US$17.7 billion, the report said.
PwC blamed the decline in overseas acquisitions by SOEs to their increasing domestic focus on market-oriented reforms and fewer M&A opportunities in the energy and power sector. Meanwhile, private companies pursued overseas M&As in advanced technology and market resources sectors.
“Chinese companies, especially private enterprises, are actively seeking quality M&A targets in North America and Europe, aiming to introduce advanced technology, intellectual property and strong brands to China,” said Andrew Li, leader of PwC China advisory services in central China.
“Unlike state-owned enterprises which are mainly targeting resource-related deals, private enterprises focus on industries such as high technology, telecommunications and retail to seek more diversified investment opportunities.”
PwC, however, said companies will boost their overseas investment next year but the firms may face difficult tax issues as countries are tightening cross-border tax rules.
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