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January 13, 2017

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Chinese M&As set to slow in 2017

CHINA’S mergers and acquisitions will slow from its peak in 2016 amid an expected cooling in outbound activities due to tighter foreign currency regulations, PricewaterhouseCoopers China said in a report yesterday.

China’s outbound acquisitions soared 246 percent by value to US$221 billion in 2016, marking a record in deal value and deal numbers, according to the report.

“We think China M&As for 2017 overall will track close to, perhaps slightly less than, 2016,” said Roger Liu, PwC China deals private equity leader. “Time taken for foreign currency approval is proving problematic in some transactions, while some sectors such as real estate, minority stakes and anything considered ‘non-strategic’ will be hit more than others.”

However, strategic outbound investment will continue to be encouraged, Liu said, adding that they “will continue to grow to new records from 2018.”

China National Chemical Corp was the largest buyer of overseas assets in a US$43 billion deal to acquire Swiss-based agro-chemicals and seeds producer Syngenta AG in October.

North America was the second-most popular region for Chinese acquisitions last year, with deals in media and hospitality areas such as Dalian Wanda’s buying Legendary Entertainment for US$3.5 billion, and Anbang Insurance’s US$6.5 billion deal for Strategic Hotels and Resorts.


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