Overseas M&A Deals Reach Record High in H1

Chinese companies' overseas merger and acquisition (M&A) activities reached a record high in the first half of the year, and the deals may continue to increase rapidly in the coming 12 months, a report from Deloitte China said on Tuesday.

From January to June, there were 98 outbound M&A deals from Chinese companies, worth a total of US$35.5 billion, compared with 97 agreements worth US$22.9 billion in the first six months of 2012.

Mega deals, which are those worth more than US$1 billion per transaction, accounted for 13 percent of all successful deals, also a record high since 2005, according to Deloitte.

"The rising deal valuation suggests that Chinese investors are becoming more confident at M&As in the overseas markets," said Patrick Yip, the national M&A leader of Deloitte China.

As the United States, European countries and China have shown signs of better economic conditions this year, "it is no surprise that Chinese companies are becoming more optimistic of late, and are making larger overseas investments as a result", Yip said.

This report showed that about 30 percent of M&A deals from Chinese companies were within the energy and resources industry, and 23 percent were from the consumer business sector.

The US saw the largest increase in investment from Chinese companies in terms of transaction value, climbing to US$11.4 billion from US$6.2 billion.

The Deloitte report also showed that about 72 percent of survey respondents said they were looking to acquire overseas assets over the next three years, and 74 percent of them believe that the level of overseas M&A activities will increase in the coming 12 months.