Freshfields: China to Continue Leading in M & As
China maintained its magnetism for international companies last year, attracting almost $35 billion of new inward investment, according to analysis by international law firm Freshfields Bruckhaus Deringer.
Despite political uncertainties caused by the leadership handover, a spate of accounting scandals and anxieties about economic growth, investment into China rose 3% compared to 2011, reaffirming the country’s position as “the prime investment hotspot among the world’s key growth markets” during 2012.
It’s the third time during the past five years that China has been the most sought after investment destination.
“2012 turned out to be a more encouraging year for deal making, especially in the high-growth markets in Asia where we saw several significant M&A transactions announced during the year,” said Freshfields’ Asia managing partner Robert Ashworth.
“Activity levels in China, in particular, rebounded well, with another solid increase to $35 billion in aggregate cross-border deal activity recorded,” he added.
After China came Mexico ($25.6 billion) — almost entirely due to a $20 billion acquisition by Anheuser-Busch InBev — then Russia ($18.6 billion), Brazil ($18.2 billion) and Indonesia ($13.7 billion).
By deal volume, China also took the top spot with 598 transactions, followed by Russia in second place with 384 deals.
The value of global M&A investments targeting the world’s key growth markets surged by 5% during 2012 (to $162.4 billion) compared to the previous 12 months. It followed a decline of almost 25% the previous year (2011 compared to 2010).
Activity was dominated by acquisitions in the banking, food and beverage, metals and mining, and insurance industries, accounting for almost 45% of total investments.
The US was the most acquisitive nation in the growth markets. In fact, it committed the most investment in these markets since 2007, an increase of almost 70% on the previous year to more than $13 billion.
It was followed by Belgium (because of the Anheuser-Busch InBev deal), Hong Kong and Singapore. By volume, Hong Kong ranked in second place with 324 transactions.
– FinanceAsia