Number of company takeovers with Chinese participation 2012-2022
In 2022, around 2,536 merger and acquisition (M&A) transactions involving companies from mainland China were completed. 2,421 transactions included domestic companies and only 115 transactions were cross-border deals.
M&A development in China
Over the last two decades, domestic and cross-border M&A transaction volume in China increased considerably, driven by the continuous maturation of the Chinese economy. In domestic markets, company takeovers were seen as a means to achieve economy of scale and higher levels of business integration amongst growing competition in the market. Many Chinese businesses are attracted to cross-border takeovers because it allows them to achieve foreign know how, intellectual property, and brands that improve their own competitiveness and allow them to climb the value chain. In 2016, M&A activities of companies from China peaked at around 3,100 completed transactions. This steep rise in market size caught government attention in China, as well as abroad, and led to the initiation of stricter controlling measures on domestic and foreign markets. Transaction figures have fallen since, but are still on a higher and more mature level than ten years ago.
Regional and sectoral distribution of M&A activities
In terms of cross-border deals, outbound M&A transaction value of Chinese companies decreased considerably since 2016, most severely affecting European and North American markets. However, It was mostly large-sized deals that were affected, and the overall deal volume of outbound M&A announced in 2019 increased again compared to the previous year, before dropping again. Companies in technology and consumer product sectors were preferred M&A targets of Chinese corporations. At the same time, inbound M&A transaction value in China, albeit at a lower level, increased steadily since 2016 but failed to continue the trend despite further market openings. In domestic markets, sectors with a high volume of M&A transactions were biotech and pharmaceuticals, IT, and mechanical engineering.
M&A development in China
Over the last two decades, domestic and cross-border M&A transaction volume in China increased considerably, driven by the continuous maturation of the Chinese economy. In domestic markets, company takeovers were seen as a means to achieve economy of scale and higher levels of business integration amongst growing competition in the market. Many Chinese businesses are attracted to cross-border takeovers because it allows them to achieve foreign know how, intellectual property, and brands that improve their own competitiveness and allow them to climb the value chain. In 2016, M&A activities of companies from China peaked at around 3,100 completed transactions. This steep rise in market size caught government attention in China, as well as abroad, and led to the initiation of stricter controlling measures on domestic and foreign markets. Transaction figures have fallen since, but are still on a higher and more mature level than ten years ago.
Regional and sectoral distribution of M&A activities
In terms of cross-border deals, outbound M&A transaction value of Chinese companies decreased considerably since 2016, most severely affecting European and North American markets. However, It was mostly large-sized deals that were affected, and the overall deal volume of outbound M&A announced in 2019 increased again compared to the previous year, before dropping again. Companies in technology and consumer product sectors were preferred M&A targets of Chinese corporations. At the same time, inbound M&A transaction value in China, albeit at a lower level, increased steadily since 2016 but failed to continue the trend despite further market openings. In domestic markets, sectors with a high volume of M&A transactions were biotech and pharmaceuticals, IT, and mechanical engineering.
