Trends in M&A

China outbound deals: 2014 first-half update

The strong growth in China’s outbound mergers and acquisitions anticipated at the end of last year has emerged, with $32.1bn worth of deals announced in the first six months of 2014, up 40% on the previous half.

More than a third of the investment was in high-tech, telecommunications and real estate. In the previous four halves these sectors accounted for only 1% of China’s total outbound M&A.

Our latest Trends in M&A report finds:

  • The level of deal activity from privately owned enterprises (POEs) more than tripled from the previous half.
  • Australia saw deal values increase from $1.7bn in the second half of last year to $2.4bn in the first six months of this year, a rise of 42%.
  • China's M&A in Australia was highly concentrated in the mining and minerals sector.
  • Significant investment in real estate and infrastructure was noted however that was not in the form of corporate M&A.


A free trade agreement with China encompassing higher Foreign Investment Review Board (FIRB) approval thresholds and an easing of the current thresholds for State-owned enterprises (SOEs) will be welcome news and a positive catalyst for Chinese investment in Australia.

We expect robust levels of outbound M&A to continue and three trends to feature over the next half of 2014:
  • Increasing diversity in China’s foreign deals. In Australia we expect expansion into consumer sectors, and investment in real estate and infrastructure.
  • Increasing number of deals from POEs driving deal growth and diversification and more strategic investment in natural resources expected.
  • SOEs will continue to be an important source of capital but the current focus on domestic reform may slow growth in SOE deal activity in the short to medium term.
Download Trends in M&A – China outbound deals: 2014 first-half update