Overseas M&As cool as home deals active

CHINESE enterprises buying overseas assets plunged 46 percent in the third quarter annually although they were active in domestic takeovers, according to an industry report.

There were only 22 cases of overseas mergers and acquisitions, totalling US$1.9 billion, involving Chinese companies from July to September from a year earlier, Zero2IPO Research Center said in a report released yesterday.

"Outbound M&A deals tumbled 74 percent from the second quarter, the lowest since 2011. Their contribution to the M&A market fell from 68 percent in the first half to 28 percent in the third quarter this year," the Beijing-based research firm said in the report.

China's economic growth has slowed for seven quarters and hit 7.4 percent in the third quarter, hurt by weak external and domestic markets.

Even foreign takeovers of Chinese firms sank 65 percent annually to just six in the period, totalling US$235 million, the report said.

Although domestic mergers also fell an annual 25 percent in the three months to 205 cases, they rebounded 22 percent from the quarter ended on June 30. The domestic takeovers were worth US$4.5 billion, or 88 percent of all M&A cases involving Chinese firms, said Zero2IPO.

"The M&A market in China has experienced a structural transformation in the third quarter mainly due to the rebound in domestic takeovers. Investors became more prudent with overseas acquisitions amid the prolonged financial turmoil," Zero2IPO said.

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