China's outbound M&A volumes nearly halved in the first six months of 2017 following the central government's supervision of capital outflows, data showed, and its new scrutiny of acquisitive groups, including Anbang and HNA, is set to dampen Asian deal flow further.
Overseas deals by Chinese companies — the engine of M&A activity in Asia — fell 49 percent in the first half of 2017 from the year-ago period to $64.2 billion, dragging down regional deal volumes, according to Thomson Reuters data.
The total value of announced M&A activity in the Asia-Pacific region fell 15 percent in the first half of this year to $458.4 billion from the year-ago period, the data showed. China was the top nation for both inbound and outbound deals in the Asia-Pacific region for the half year, attracting $28.5 billion worth of inbound deals.
A slowdown in Chinese deals, especially large-sized ones, could inflict further pressure on Asian revenues of Wall Street banks, who are already feeling the pain of growing competition from Chinese investment banks. M&A is among the few areas where Chinese banks haven't already gained a strong foothold.
Chinese firms spent a record $221 billion on assets overseas, ranging from movie studios to football clubs in 2016, but Beijing's move to prop up the yuan by restricting capital outflows has made it tougher for domestic buyers to win deals abroad.
Still, Chinese State-owned firms struck some of Asia's top deals in the first half. China Investment Corp wrote a 12.25 billion euros ($13.93 billion) cheque to acquire European warehouse firm Logicor from private equity group Blackstone, the region's largest during the first half.
But this year is unlikely to see any blockbuster deals such as last year's roughly $44 billion ChemChina-Syngenta tie-up. Bankers instead expect more activity to be driven by private equity firms.
