China’s international deals shrank in 2017 – Rupert Hoogewerf

Overseas mergers and acquisitions by Chinese companies went down in value over 2017, says a report by Hurun. Especially the real estate and energy industries went down, says Hurun chief researcher Rupert Hoogewerf to Global Times. Retail, technology and manufacturing did relatively well.

Global Times:

In 2017, M&A deals by Chinese companies fell 1.7 percent year-on-year to 400, said the report.

Among these deals, 312 disclosed the amount of investment, which was 960 billion yuan ($152.11 billion), down 28 percent year-on-year. The value of the top 100 M&A deals slumped 37 percent to 880 billion yuan.

The manufacturing industry had the largest number of M&A deals in 2017, followed by technology, retail, energy, mineral, public services, medical, financial services and property, the report noted.

Compared with 2016, the energy and real estate sectors had the biggest declines in transaction numbers, while manufacturing, technology and retail had the largest gains, Rupert Hoogewerf, chairman and chief researcher of the Hurun Report, was quoted as saying in the report.

The largest deal involved a consortium led by property developer Vanke, Bank of China Group Investment and venture capital firms Hopu Investment and Hillhouse Capital Group, which acquired 78 percent of Singapore-based logistics company GLP Group for 104 billion yuan.

The US was still the hottest destination for Chinese investors in 2017, with 16 investments. But the number of M&A deals fell 14 compared with 2016, according to the report.

The report said that the Belt and Road initiative has offered new opportunities for Chinese companies. In 2017, the transaction volume of M&A deals in countries and regions along the Belt and Road routes surged 25 percent year-on-year to 240 billion yuan. By 2030, investment is estimated to reach 30 trillion yuan.