Rocketing Chinese M&A at risk from new rules and global protectionism
Chinese mergers and acquisitions (M&A) activity into North America grew by 412 per cent last year, according to figures out today.
Outbound acquisitions overall were up 201 per cent in Europe, meanwhile, and globally 114 per cent to $208.6bn (£166bn) in value.
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Law firm Clifford Chance, in its Global Shift report, said the Chinese shopping spree was prompted by an “abundance of capital and cheap debt, pursuit of growth outside a slowing economy and efforts to meet demands of a more affluent middle class”.
However, new outbound M&A Chinese government rules put forward late last year could be a dampener this year.
And Clifford Chance also noted that “elsewhere, protectionist resistance to foreign bidders is increasing, and Chinese buyers in particular are subject to more stringent reviews on national security and public interest grounds”.
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“Global M&A faces a wave of national political and regulatory scrutiny and increased protectionist attitudes, largely as a result of rising populism and nationalist sentiment,” the report said.
“This manifests itself in foreign investment and national security reviews, where elected politicians are often key decision makers. In 2016, such reviews blocked acquisitions (mainly by Chinese buyers) in Germany, the US and Australia.”