Trends in Chinese M&A

Companies involved in M&A and their deal professionals in China and Hong Kong have been navigating a very changed U.S.- China dynamics for the U.S. outbound M&A market in the last few years. Based on increased barriers to entry, including as a result of greater CFIUS scrutiny, there have been fewer outbound M&A transactions from China into America for the last three years. Instead of investments and acquisitions, deal professionals are seeing divestitures becoming the new trend in the U.S. market for Chinese companies.

As a result, and given that Chinese companies continue to have investment needs from other western markets, the strategy, investments, resources and efforts of these Chinese companies has been channeled into the United Kingdom and European Union. While this trend was emerging in 2021, the United Kingdom introduced the UK National Security and Investment Act. As the NSIA came into force in January 2022, the implications are still being evaluated, and it is too early to predict how this may impact deal trends out of China.

Dorsey’s  M&A leaders in our three China offices, along with M&A partners in our London office, will discuss the deal treads that we are seeing out of China into the UK market. With the NSIA and changing dynamics between UK and China, will we see a delay effect on deal treads in 2022? What are in the minds of deal makers in China? Are we going to be seeing divestitures on the horizon for Chinese investments in the UK markets? At our upcoming webinar, our UK, HK, and China colleagues seek to help you find answers and strategies to navigate deal trends between China and the UK in 2022. More information and complementary registration information can be found here.

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