With $1.42 billion of acquisitions in China over the last nine months, the value of Canadian deal-making in China this year has outpaced even the merger and acquisition boom of 2007, according to a new PwC report released this morning.
The Capital Markets Flash notes the average value of China-bound deals was $217 million this year, up 371% over the prior year and 2,223% higher than average China-bound deals at the 2007 M&A peak.
However, the report notes the increase was skewed by three large transactions:
-Power Corp.of Canada acquiring a 10% stake in China Asset Management for $276 million;
-Bank of Nova Scotia announcing a 19.9% stake in Bank of Guangzhou Co., Ltd. for approximately $719 million;
-CPP Investment Board acquiring a 50% stake in Hong Kong Interlink Project from Australia’s Goodman Group for $285 million.
While the increase in deal value may be skewed, PwC also noted an increase in volume of Canadian China-bound deals.
Canada made relative gains in China-bound deal volume when compared with the U.K., Germany and Australia’s investments in the country, said Kristian Knibutat, PwC’s Canadian deals leader.
“We haven’t seen a situation recently where Canada has been ahead of those countries, in terms of volume, and this would be the first year that we’ve seen that. We’re still well behind the U.S., but what it does indicate, in terms of a target market or where Canadians are going relative to other countries – we’re seeing a relative increase in the level of volume.”
Jenny Wagler
Twitter: JennyWagler_BIV