China’s M&A Begins to Look Outward

 There’s no avoiding that China is a key player these days, and Apple’s push into that market with the new iPhone is just another indicator of what we’ve seen coming.

Until recently China has not been heavily involved in global tech M&A, but that is starting to change. Looking back, we saw the boom in Chinese IPOs, which peaked in 2010. With the new liquidity from the public markets, cash became readily available and helped to create new buyers. Suddenly, Chinese M&A began to show its significance, but still remained largely domestic. As the IPOs have shut down and the domestic M&A has cooled, those buyers are beginning to look elsewhere.

On the other side of the coin, foreign investors have re-focused their attentions to the East -- no longer as mere investment candidates, but now as targets for cross-border M&A. China has become more available; with a brigade of 3-5 year old public tech companies, we expect to see a lot more attention and a lot more buyers chasing the dragon. As it stands, after Chinese domestic buyers, the US accounts for almost all the rest of the acquisition activity in China, and we don’t expect that to last much longer.

Posted by , Executive Advisor on 8 November 2013
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