Outbound merger and acquisition (M&A) activity from the Chinese mainland set a record in the first nine months of this year, with 257 deals - more than the total for all of 2014, according to a report released by PricewaterhouseCoopers (PwC) China on Wednesday.
The total deal value reached $45.2 billion, slightly higher than during the same period in 2014, the report said. There were 11 deals with values greater than $1 billion, lower than the 14 deals made in the same period in 2014.
Listed enterprises remained the primary target of outbound M&A, the report said, with deal volume in that category accounting for 62 percent of the total.
"China is undergoing a period of industrial upgrading and transformation," Qiu Yanying, partner and chief strategist at VStone Asset Management Co, told the Global Times on Wednesday.
"Many enterprises want to acquire companies overseas to obtain better technology, while many overseas companies hope to develop in China to benefit from the great domestic market. That's one of the major reasons why there are so many M&A deals," Qiu noted.
"From a financing perspective, easy monetary policies, low interest rates and reserve ratios, and a significant surge in China's stock markets in the first half of 2015 helped drive deals," Li Ming, an advisory leader at PwC China, said at a press conference held in Shanghai on Wednesday.
Qiu said that M&A deals have significant implications for the Chinese mainland stock market. For instance, many enterprises on the ChiNext Board, the country's NASDAQ-style board, will get higher valuations in the capital market if they are successful in M&A deals.
Successful deals will enable these enterprises to develop well in the market, and investors will look positively on that situation, Qiu noted.
Also, the PwC report said that private-sector companies remained the driver in China's outbound M&A activity in the first three quarters, with deal volume more than triple that of State-owned enterprises.
Qiu said many sectors of the domestic economy offer great potential, including healthcare, energy conservation and environmental protection. Qui advised domestic enterprises to focus on market demand, not just the acquisition of technology.
