Figures from Robert W Baird & Co indicate there were 164 M&A deals emanating from Chinese buyers in the first six months of the year, up from 116 a year earlier. Inbound M&A activity to China decreased by 5.5 per cent.
Tosh Kojima, who leads the Japan Asia focus group at DC Advisory Partners, says that the rise in outbound Asian M&A activity is driven by an increasingly affluent consumer base that covets Western cars, fridges and vacuum cleaners.
In addition, valuations have decreased in the US and Europe as a result of difficult economic conditions and Chinese manufacturers are “scouting” the landscape to acquire foreign intellectual property and technology.
“Due diligence for private equity firms tends to be very financial, focusing on Ebitda and accounting processes. Asian buyers tend to look at deals differently,” says Andrea Bonomi, chairman of InvestIndustrial, who recently sold specialist construction company Permasteelisa to Japanese group JS Corporation.
“These guys are asking: how much more can your plant produce? All they care about is growth and market share,” he added. “It’s almost like the dotcom boom.”
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