Chinese companies have sharply reduced mergers and acquisitions abroad

Moscow. April 24. Company of China in the first quarter of 2017 made mergers and acquisitions abroad by $21.2 billion, which is 77% less than the amount registered in the same period last year, the report said PwC.

According to PwC, for the first three months of the year Chinese companies have reduced the number of M&A outside the country more than a third (-39%), having signed 142 deals.

According to experts PwC does Mine, from the fourth quarter of last year the controlling authorities of China have strengthened the validation and legitimacy of investment activities of Chinese enterprises abroad, reports “Xinhua”.

“Uncertainty about the international political situation is another factor” contributing to the decline in the number of M&A transactions involving companies from China, said Director of PwC China in support of M&A Zhen Zhao.

In 2017, the Chinese enterprises in the field of M&A abroad “will return to the rational,” predicts Zhen Zhao.

According to the newspaper Caixin, China’s regulators decided that companies rush to make deals abroad for fear of a weakening of the Renminbi and that purchase assets that do not always correspond to their core activities, and often overpay.

Chinese investors continue to prefer the developed markets of North America and Europe, said Li Min. For all of 2016 and first quarter 2017, about 60% of mergers and acquisitions of Chinese companies abroad have been concluded with enterprises in these countries.

However, the growing interest of Chinese companies to invest in projects in the construction of the “Belt and road”, said the expert of PwC.