CHINA Trends and Developments Contributed by: Bing Zhai, Commerce & Finance Law Offices
Overview of China’s M&A Market in 2024 In 2024, China’s M&A market showed notable momentum towards recovery. According to Wind Information data, the total number of M&A transactions for the year reached 8,378, repre - senting a 5.6% decline compared to 2023. The total M&A transaction value rose to CNY2.02 trillion in 2024, marking a 1.6% year- on-year increase and breaking the downward trend observed over the previous two years. Notably, in the second half of 2024, the M&A market in China reached CNY1.23 trillion, with year-on-year growth of 9%. This upward trend indicates that, despite a decrease in the number of transactions, the average size of M&A deals has increased, reflecting a shift towards larger- scale and higher-quality transactions. On 24 September 2024, the release of the Opin - ions of the China Securities Regulatory Commis - sion (CSRC) on Deepening the Market Reform for M&A and Restructuring of Listed Companies (the “Six M&A Guidelines” ) sparked widespread discussion within the M&A market. According to Wind Information data, a total of 131 major asset restructuring projects were disclosed in the A-share market throughout the year, with the transaction volume in the fourth quarter increas - ing by 117% quarter-on-quarter, significantly influenced by the Six M&A Guidelines. Hot Sectors for M&A Activity in China in the Past 12 Months The technology sector: a hotspot for M&A The technology sector emerged as one of the most active areas for M&A. In the semiconduc - tor industry, numerous companies engaged in acquisitions to secure advanced technologies, expand their market share and enhance their global competitiveness. These transactions aim to integrate resources and overcome key tech -
nological challenges, particularly as domestic demand for semiconductor self-sufficiency grows. The technology sector stood out as one of the most vibrant areas for M&A activity in 2024. These transactions were driven by the grow - ing domestic demand for semiconductor self- sufficiency, as well as the need to overcome critical technological bottlenecks. By integrat - ing resources through M&A, companies aimed to accelerate innovation and strengthen their positions in the global supply chain. In the artificial intelligence (AI) sector, compa - nies are also leveraging M&A to strengthen their technological capabilities and accelerate the application of AI across various industries. For instance, leading tech companies are acquiring companies specialising in AI algorithm develop - ment and application deployment. Companies leveraged acquisitions to bolster their techno - logical capabilities and accelerate the deploy - ment of AI solutions across various industries. These strategic moves not only enhanced their technological portfolios but also put them into a position to capitalise on the rapid growth of AI-driven applications in sectors such as health - care, finance and manufacturing. The manufacturing sector: active M&A for transformation The manufacturing sector also demonstrated robust M&A activity, particularly as companies sought to navigate challenges such as declin - ing industry cycles, the elimination of outdated capacity and increasing market concentration. In the automotive industry, for instance, M&A became a critical tool for resource integration and industrial upgrading. Traditional automotive manufacturers, facing pressure to adapt to the shift towards electric vehicles (EVs) and smart
473 CHAMBERS.COM
Powered by FlippingBook