Liu Minxia

    mllmx@msn.com

    THANKS to growing competition for assets prompted by industry consolidation, Chinese companies’ mergers and acquisitions (M&As) grew in both total deal value and the size of transactions in the first half of the year and will continue to rise, the latest report by PwC said.

    The total deal value of M&As by Chinese firms soared to US$183 billion in the first half of 2014 in China, 19 percent larger than the previous quarter, the report said.

    “M&A activity in the first half of the year was notably strong thanks to growing competition for assets prompted by industry consolidation, companies searching for inorganic growth, and State-owned enterprise (SOE) reforms,” Roger Liu, PwC China and Hong Kong deals PE leader, told reporters Tuesday.

    Another contributing factor for the high figures is that deal sizes were larger than last year, with 30 deals exceeding US$1 billion. Sizable technology deals were seen in the Internet space in particular, and in financial services. Strong activity was also seen in the real estate sector as Chinese property developers sought access to capital markets through back-door listings, according to the report.

    China outbound M&A activity continued to track close to the elevated levels seen in the second half of 2013, but did not exceed the highs seen last year.

    “With continuing demand for equity capital in China, and more Chinese private equity firms competing for assets abroad, the pipeline for private equity deals will remain robust in the second half of 2014. There will also be more private equity participation in SOE reforms as a source of larger transactions in China,” Liu said.