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China Surpasses U.S. As Global Leader In Outbound M&A

By Kurt Osterberg · On May 14, 2016

China has become the global leader in outbound M&A with the U.S. becoming the number one destination of the Chinese shopping spree accounting for 28% of its outbound M&A activity.

Written by Wolf Richter (WolfStreet.com)

Chinese companies are on a shopping binge…backed by their government and their state-owned banks…

to diversify away from the yuan, fearing that it will fall further…

to lessen their dependence on the slowing Chinese economy, seeing perhaps how it is heading into trouble…

to acquire technologies and enter high-value-added sectors…

to get more influence in the global economy and have a say in the global rule-making processes

and when the state-owned banks simply create the money for China Inc. to blow on foreign companies, price is apparently no objective.

Chinese mergers & acquisitions in other countries:

have hit $110.8 billion, nearly four times as much as during the same period last year, and surpassing the total volume of the entire year 2015…and so China Inc. has become the number one cross-border acquirer for the first time ever…

the number of deals soared 79% year-over-year to 300…and of these, 17 were mega-deals of $1 billion or more, up from 6 such deals last year.

The U.S….has now become the number one destination of the Chinese shopping spree…soaring sevenfold from $3.9 billion last year to $31.3 billion so far this year, the highest total ever. It accounted for 28% of China’s outbound M&A activity.

The largest deal so far this year was aviation and ocean freight conglomerate Tianjin Tianhai’s $6.3 billion acquisition of technology products distributor Ingram Micro…[which] brought China’s acquisitions in the global tech space to $17.6 billion so far this year, giving it a 45% share of global tech M&A, thus unseating the U.S. that had dominated this game since 1995.

Withdrawn or collapsed deals also set records: Chinese companies pulled 15 bids for a total of $24 billion, up from 10 bids and $1.6 billion last year at this time. The biggest bid that went awry this year was Anbang’s blockbuster $15.5 billion effort to yank Starwood Hotels out of Marriott’s claws.

State-owned China National Chemical plunked down $44 billion in February to grab Monsanto’s former target, Syngenta, a Swiss-based pesticide and seeds maker. It was the largest Chinese takeover ever.