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Chinese Acquisition Proceeds in US Reach Record Levels

Whether due to anxiety about its economic growth prospects or simply a desire to put its lofty corporate  cash reserves to work, Chinese acquisitions in the United States, based on aggregate deal value, have hit a new record high in 2016 based on information from S&P Global Market Intelligence. As indicated below, to date in 2016 nearly $24 billion worth of Chinese buyer or investor purchases of U.S. based businesses or assets has been announced.

This year’s present tally  tops 2015’s full-year total for Chinese M&A in the U.S. of $9.4 billion and also exceeds the previous annual record for Chinese M&A in the U.S. of $11.8 billion set in 2013. That year saw the largest-ever Chinese acquisition of a U.S. company when Henan Shineway Industry Group Co., Ltd. agreed to acquire Smithfield Foods, Inc. (NYSE:SFD) in a transaction valued at $7.3 billion on May 28, 2013.

Chinese Acquisitions of US Targets

Further evidence of the strength of Chinese pursuit of U.S. targets is the fact of the five largest ever deal announcements, four have taken place this year.

Topping this year’s list for Chinese MA& in the U.S. is Tianjin Tianhai Investment Co., Ltd. (SHSE:900938) signing a definitive agreement to acquire Irvine, California-based technology distributor Ingram Micro Inc. (NYSE:IM) in a transaction worth $7.25 billion on February 17, 2016.That was followed by Qingdao Haier Co., Ltd. (SHSE:600690) signing a definitive agreement to acquire GE Appliances Inc. from General Electric Company (NYSE:GE) for $5.4 billion in cash on January 15, 2016. 

An examination of deal activity since 2007 finds that of 515 announced Chinese M&A deals involving U.S. targets, financials is the most active sector with 108 deals. That’s followed by 94 transactions involving consumer discretionary targets and 86 in information technology. Conversely, the fewest Chinese deals in the U.S. since 2007 are in the  telecommunication services with 5 deals and utilities with 7.

Leading Chinese Acquisitions of U.S. Targets

Leading Chinese Acquisitions of U.S. targets

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