China M&A activity will enjoy a continuation of the strong growth seen in 2004 in the current year, with larger and more complex deals being undertaken, according to PricewaterhouseCoopers' Transaction Services group. The rapid increase in activity is being fuelled by the ongoing restructuring and privatisation of former State Owned Enterprises ("SOEs"), together with strong inbound investment across a range of industries. This is particularly evident in those industries being deregulated where foreign participation was previously restricted to joint ventures and minority stakes.
China M&A increased by 50% in 2004, compared to 2003, according to M&A Asia. The aggregate value of China deals (including Hong Kong) announced in 2004 was $52 billion, compared with $35 billion in the previous year. In terms of Asia-Pacific as a whole, aggregate deal values were 38% ($69 billion) higher at $250 billion, compared with $181 billion in the prior period.
Jim Woods, Partner, PricewaterhouseCoopers' Transaction Services, said: "It's full steam ahead in terms of China M&A. Deal activity continues to escalate, and we are also seeing an increase in the size of the deals we are working on. Two or three years ago transactions of $100 million or more were the exception, but last year we advised on a number of these larger deals, and this trend is continuing in 2005."