The deal value of merge and acquisitions by Chinese companies rose 30% to $733.8 billion in 2020, the highest level since 2016, and the number of M&A deals increased 11% from the previous year, according to a new report.
According to the PwC report, the volume of cross-border deals by Chinese companies decreases in 2020, and private equity fund activity rises sharply.
China's merge and acquisition deal value held steady after a dip in February 2020 due to lockdown measures and rebounded strongly in subsequent months, significantly outpacing the same period of the previous year in the latter half of the year, according to the report.
There were 93 mega merge and acquisition deals ($1 billion or more in a single deal) in 2020, with private equity funds posting a record $332.4 billion in merge and acquisition deal value.
The COVID-19 epidemic raged abroad in 2020, severely dampening overseas merge and acquisition activity by Chinese companies and making cross-border deals in developed nations such as the US and Europe exceptionally difficult.
The value of overseas merge and acquisition deals by Chinese companies fell to $42 billion, the lowest since 2010. The number of merge and acquisition deals fell to 403, the lowest since 2015. China accounts for about 15% of the global merge and acquisition market by volume and deal value and is playing an increasingly important role in the global market.
Overall mergers and acquisition driven by private equity funds and financial investors, including state-owned funds, will see some growth in 2021, and private equity deal volumes will continue to grow, according to the report's forecast.
PwC expects that the overall level of overseas investment is likely to increase from 2021 onwards. However, it will take time for overseas economies to recover, and it is not certain for now whether the overseas investment in 2021 will surpass that of 2019.
