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Private-equity investors to return to China in search of M&A deals in 2024, Bain & Co says

  • It may take longer to conclude deals, ‘but it is certain that more transactions will be conducted’ in 2024, Bain executive says
  • Mainland China M&A deals dropped to a nine-year low last year amid a third straight year of declines, Refinitiv data shows

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The Liuiazui financial hub in Shanghai. Beijing will unveil its annual growth targets for GDP, consumer inflation and fiscal deficit for 2024 in March, at the National People’s Congress. Photo: Bloomberg
Daniel Renin Shanghai
Global and domestic private-equity investors are making a comeback to the Chinese mergers and acquisitions (M&A) market following three straight years of decline, as they look to profit from an economic recovery, global consultancy Bain & Co said.
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Private-equity investors will focus on improving profitability and bolstering revenue from their portfolio firms, rather than potential frothy valuations, when they are making investment decisions, said Zhou Hao, head of the firm’s Greater China private equity and M&A practice.

“New talks on deal making [have] resurfaced since the second half of 2023,” he said. “It may take longer to conclude the deals, but it is certain that more transactions will be conducted this year.”

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Bain’s statement is significant because, despite a drop in deal volumes, mainland China still accounted for 41 per cent of deals in the Asia-Pacific region in the first half of 2023, according to S&P Global Market Intelligence.

Mainland China reported 5,156 M&A deals in 2023, with a combined value of US$301 billion, according to Refinitiv data. This was a nine-year low and a third straight year of declines, in terms of deal volumes.

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