In our latest market survey, taken over the course of the past two months, we received an overwhelming response on the expectations for China’s outbound M&A for the coming year.
There was interesting feedback on the push and pull factors affecting sentiment, sectors of interest, countries open to investment, as well as diverse and candid experience sharing from sources across the globe, spanning Asia, Europe and the US, on the difficulties being faced in deal-making. While some were optimistic about the potential uptick in Chinese outbound M&A in sectors such as healthcare and TMT, others took a more pessimistic view in light of China-US tensions and the Ukraine-Russia conflict.
Our survey results show that concerns have heightened around the CFIUS regime in the US and increasingly challenging national level FDI screening regimes sweeping across Europe, including in Germany, which has been an important investment destination for Chinese investors. We will delve into the impact these regulations will have for investors and how they are altering their investment strategies.
Opportunities are abound, however, in markets such as Southeast Asia where FDI regimes similar to CFIUS are non-existent and targets are aplenty in sectors such as consumer brand and e-commerce.
In part one of the report, we take a look at the factors affecting deal volume and size, areas of interest for investors, and how they are adapting to the challenging deal-making environment. This will be followed by a more in-depth look at regulatory challenges to outbound M&A within China, and the barriers and opportunities in Southeast Asia, the US and Europe.
Read part one of the report here.
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