China: Inbound, outbound M&A deals don’t match up

The difficulty for foreign companies to acquire Chinese firms shows no sign of letting up in 2014, but the trend is offset by the record-setting year Chinese firms had when acquiring other, foreign firms.

Reports say Chinese buyouts of overseas companies hit a new high in 2013. The trend emerged as reports frequently highlight the growing obstacles foreign firms face when looking to do business in China: lengthy merger reviews, strict regulators and industry crackdowns.

According to reports, telecommunications, Internet and media industries are the most difficult in which to do business for overseas companies. But others, including the food industry, have their own barriers; the 2011 buyout of China-based Yinlu Foods Group by Nestle took seven months to complete.

That is compared with China’s Shuanghui International Holdings’ buyout of Smithfield Foods last year, which cleared US review within four months.

Further, reports contrast M&A numbers of inbound and outbound M&A activity. Outbound deals reached a value of $68.7 billion last year, while inbound deals dropped to 540 transactions in the same timeframe – down from 831 the year before.

Full Content: Wall Street Journal

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