While deals are seen dropping sharply in the first half, some private equity buyers are still negotiating with sellers despite travel restrictions, cities in lockdown.
China’s total M&A deal value fell 14 per cent in 2019 to US$559 billion, the lowest in five years, driven primarily by a sharp 37 per cent drop in outbound transactions, according to data released by PwC on Thursday.
"The epidemic could even spur more M&A activity, as companies see the merits of shifting some of their operations out of China to other Asian countries, said David Brown, deals leader for Asia-Pacific at PwC.
PwC’s 2019 China M&A review, published on Thursday, shows that China outbound M&A transactions ticked up 6 per cent in number, to 667 deals, but their total value plummeted by 37 per cent to US$57.3 billion. This was primarily because there were fewer mega transactions in 2019, of US$1 billion or above, Brown said."
Expect a bounce back in the second half of 2020, across all business activities, including mergers and acquisitions. Brands that hold their position and show commitment to their Chinese consumers and partners will be remembered - and respected. This will lead to long term business value.
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