Almost two months into the new year and M&A activity has failed to maintain last year’s momentum. This year’s M&A activity has seen a 23% decline compared to the same time last year. 2016 has brought much uncertainty to corporations and countries worldwide as they address problems ranging from monetary policies to worries of a global growth slowdown. Last year’s M&A activity was record breaking with deals totaling more than $5 trillion, the first time this mark has ever been reached (2007, adjusted for inflation surpasses this coming in at $5.27 trillion). Despite this year’s decline, deals totaling $336 billion have already been announced. Chinese corporations have contributed a significant part to this year’s tally. So far there have been roughly 80 such deals year-to-date coming from Chinese corporations. Although Chinese firms buying foreign companies is not new, this year’s buying comes from a country that is facing financial pressure on several fronts and from the world’s point of view, a country that has slowed significantly. Below are just some of the deals announced thus far:
– China Chemical National Co, or ChemChina, whose operations range from production of various chemicals, rubber products and industrial equipment, offered to buy Syngenta, a producer of agrochemicals and seeds for $43 billion. If approved by regulators worldwide, it would be China’s most ambitious takeover to date.
– Last year ChemChina bought Pirelli, the fifth largest tire-maker in the world for $8 billion.
– ChemChina has also agreed to buy KraussMaffei, a German manufacturer of machinery that process plastics and rubber, for $1 billion.
– HNA’s Tianjin Tianhai will buy Ingram Micro for $6 billion. Ingram Micro is one of the largest global wholesale distributors of personal computer and other tech products.
– Perfect World Pictures has planned to invest $250 million with Universal Pictures to cover 25% of production costs with most movies over the next five years.
– Dalian Wanda has agreed to acquire media company, Legendary Pictures for $3.5 billion in cash.
– General Electric, which has been slimming down in order to shed its SIFI (systemically important financial institution) designation and return to its industrial roots, has agreed to sell its appliances unit to Haier for $5.4 billion.
– Zoomlion Heavy Industry Science and Tech has made an unsolicited offer to buy U.S crane maker, Terex for $3.3 billion even though there is already a merger pending with Konecranes.
– Fairchild Semiconductor which is already in deal talks to be acquired by ON Semiconductors for $2.3 billion, has an offer by China Resources Microelectronics Ltd. partnered with Hua Capital Management, that would value the company closer to $2.5 billion. (The U.S Committee of Foreign Investment has advised not to proceed with a China deal.)
– Royal Phillips had planned to sell an 80% of its LED components business for $2.8 billion to GO Scale Capital, a consortium of mostly Chinese investment funds. This however was terminated at behest of the U.S Committee of Foreign Investment, siting security concerns.
– China since November of last year has added roughly 60 tonnes of gold, estimated at upwards up $2 billion, to its official reserves.