Inbound investors seeking to make a killing may find themselves targeted by regulators. Richard Li lays out the compliance risks they should be aware of before swooping on any bargain acquisition in China
With Chinese authorities stepping up their hunt for irregular business activities, compliance has become critical to the success of almost all business activities in China – and mergers and acquisitions (M&A) are no exception.
The stakes have never been higher. Inbound M&A activity in China has already surpassed the value of every other year on Mergermarket’s record, notes Kirsty Wilson, a UK-based global research editor for the intelligence service company. “It is clear that larger deals are being announced more often. In 2014 so far, there have been four inbound deals valued higher than US$1 billion, that’s double the number compared to the same time in 2013,” she says.
“The most active sector by both deal count and deal value is energy, mining and utilities,” Wilson adds. “Technology M&A also seems ripe for activity during 2014 with 15 deals valued at US$2.4 billion already over double the value of 2013’s annual total.” (See ‘Hot inbound activity’, page 27.)