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China M&A flurry drives cross-border activity to 11-year high

[LONDON] Worldwide cross-border mergers and acquisitions activity has hit US$132.7 billion so far in 2016, up 31 per cent compared with a year ago and the strongest year-to-date period since 2006, driven by Chinese acquisitions, Thomson Reuters data shows.

ChemChina agreed to buy Swiss seeds and pesticides group Syngenta this week for US$43 billion, the largest-ever foreign purchase by a Chinese firm and the biggest-ever Chinese-involvement M&A deal, according to the data.

Chinese acquisitions abroad now account for 47 per cent of overall cross-border activity so far this year, comprising four of the top six cross-border deals.

After hitting a record high in 2015, worldwide M&A activity has got off to a sluggish start, down 22 per cent compared with the same period last year, totalling US$241 billion.

Falling oil prices and worries about slowing growth in China has spooked markets in January causing volatile swings across asset classes and could make corporate boards more cautious on pulling the trigger on big M&A transactions.

That volatility has also dragged down the pace of new global equity offerings, which are down 45 per cent compared with a year ago, totalling just US$33 billion, the lowest year-to-date level for ECM activity in eight years.

HSBC, has moved into third position in the M&A league tables after advising ChemChina on its blockbuster deal, trailing Goldman Sachs and JPMorgan in first and second place.


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