Alicia Garcia Herrero, Chief Economist for Asia Pacific at Natixis, shared an article on how China’s M&A activity has rebounded strongly towards the end of 2020.
The Covid-19 pandemic and related restrictions impacted the country’s outbound M&A activity in early 2020, showing a decline by more than half in value compared to 2019.
However, M&A activity in China rebounded towards the end of 2020 with specific focus on European industrial companies.
The rebound was mainly driven by two deals including Tencent’s acquisition of a 10% stake in Universal Music and Shanghai RAAS’s acquisition of 45% of Grifols Diagnostic Solutions.
China’s interest in exploring global opportunities and its search for technology upgrades are primary drivers for rise in M&A activity.
Activity may not return to the record levels witnessed in 2016-2017 but may return to 2019-2020 levels in 2021.
Companies in the European Union are expected to remain the country’s main targets.