US share of China's global M&A deals 'rising'

The United States is expected to be the second-largest destination for Chinese outbound mergers and acquisitions this year, with high-tech companies being the most-sought-after targets, experts from Deloitte said on Wednesday.

In the first half of 2015, Chinese outbound M&A volume grew by 25 percent while the value jumped by 70 percent year-on-year, according to statistics from Mergermarket, a company specializing in corporate financial news and analysis.

Deals were largely concentrated in Western Europe and the US, with the former attracting half of the deal value due to the deprecating euro. Western Europe accounted for 35 transactions worth $24.3 billion, while the US took 35 deals totaling $9.9 billion.

A record increase in the M&A value in the European Union is largely attributed to the deal of Hong Kong-listed conglomerate Hutchison Whampoa Ltd buying Telefonica UK Ltd for $15.29 billion, according to Patrick W. Yip, national M&A leader at Deloitte.

"We expected the US to be the second-largest destination for Chinese outbound mergers and acquisitions this year, and Chinese interest in the US will continue to grow, especially in the technology and innovation sector," said Yip.

Because of the economic slowdown at home, an increasing number of Chinese investors plan to diversify their risks by investing in the US as the world's largest economy shows clear signs of recovering this year.

"Technology, media and telecommunications, manufacturing and consumer business assets in mature markets were the most attractive targets for Chinese outbound investors," said George Warnock, global leader of Country Services Groups of Deloitte. "Most TMT investments were concentrated in the US and were the most-sought-after targets globally."

In the first half of 2015, the value of Chinese acquisitions in the TMT sector increased by 209 percent year-on-year, Deloitte statistics showed.

Meanwhile, the share of minority acquisitions by Chinese investors also grew from a year ago, largely in mature markets such as the US and Western Europe, particularly in the technology and manufacturing sectors.

Tencent Holdings Ltd, for instance, agreed in April to acquire a 16.3 percent stake in the US-based listed company Glu Mobile Inc for $126 million.

"The depreciation of the renminbi will have a certain impact on Chinese companies' acquisitions in US in the short term, but the impact is minimal compared with their strategic purposes," said Warnock.