Technology, property sectors weigh on M&A in China for a second year in a row, Dealogic says
- Value of mergers and acquisitions falls 24 per cent so far this year to US$344.3 billion, according to data provider Dealogic
- Deal making slumps by more than 50 per cent in China’s tech sector
Mergers and acquisitions in China are set to shrink for a second year in 2019 on the back of a slump in deals in technology and real estate industries, according to data provider Dealogic.
The total value of M&A – inbound and domestic – stands at US$344.3 billion so far this year, 24 per cent lower than 2018, Dealogic said in a report on Wednesday.
The technology sector saw M&A values sink 51 per cent as “the contraction was a result of a lack of large deals and funding rounds in the technology sector, along with a sharp drop of volume in the real estate sector”, according to the report.
Still, there were bright spots, with deal making in the energy and commodities sectors bucking the decline. Such deals in the energy sector jumped 70 per cent from a year earlier, while those in the metal and steel industry surged 111 per cent.
Government efforts may be behind the spurt in M&A in these industries, as Beijing continues to push ahead with the so-called supply-side reform of weeding out excess capacity in sectors such as metals and building materials through industry consolidation.