The wave of mergers and acquisitions is coming
Recently, A-share companies have been active in overseas mergers and acquisitions, becoming a hot topic in the market. From technology to medicine, to energy, Chinese companies are realizing global layout through cross-border mergers and acquisitions. This wave of mergers and acquisitions not only demonstrates the strength of Chinese companies, but also allows us to see the profound logic behind the globalization strategy.
It is worth noting that American Goheal M&A Group (hereinafter referred to as: Goheal) pointed out in its latest M&A trend report that the M&A activity of Chinese companies in the global market is gradually recovering, becoming a highlight of the capital market.
Why are overseas mergers and acquisitions heating up?
Why have A-share companies recently set off a wave of overseas mergers and acquisitions? There are several key reasons behind it:
1. The need for industrial upgrading-as domestic market competition intensifies, many companies are facing the pressure of transformation and upgrading. By acquiring high-quality overseas assets, advanced technology, brand resources and management experience can be quickly acquired. For example, a leading new energy company recently acquired a European energy storage technology company at a high premium, which not only improved the industrial chain, but also laid the foundation for future international expansion.
2. Global market ambitions - Chinese companies' goals are no longer limited to the domestic market. Through cross-border mergers and acquisitions, some companies have been able to directly enter the international market and occupy more market share. For example, a pharmaceutical company in the A-share market not only obtained a new drug patent by acquiring a US biotechnology company, but also successfully opened up the North American market.
3. Capital drive and policy support - In recent years, the domestic capital market has continued to develop, providing companies with sufficient financing channels. At the same time, the country has also introduced a series of policies to encourage companies to "go global". Data shows that the total amount of overseas mergers and acquisitions transactions by A-share companies reached US$68 billion in 2024, up 23% year-on-year.
Experts from Goheal believe that Chinese companies are achieving the optimal allocation of capital and resources through precise mergers and acquisitions, which will further enhance their global competitiveness.
Hot industries: technology, biomedicine and green energy
From the perspective of the industry distribution of mergers and acquisitions, technology, biomedicine and green energy have become the three hot areas of overseas mergers and acquisitions by A-share companies.
Technology field - high-tech industries represented by chips and artificial intelligence are favored by Chinese companies. A semiconductor company acquired a European chip design company for $1.5 billion, filling the domestic technology gap and providing technical support for global business expansion.
Biomedicine - With the growth of health needs, Chinese pharmaceutical companies have begun to turn their attention to overseas new drug research and development companies. Recently, an A-share pharmaceutical company announced the acquisition of an American biotechnology company and obtained multiple anti-cancer drug patents, which has attracted widespread attention from the market.
Green energy - Driven by the "dual carbon" goal, the green energy field has become a key layout direction for capital. A new energy company directly obtained market access and leading technology in Europe by acquiring a German wind energy company. The M&A cases in these industries show that the globalization strategy of Chinese companies is transforming from "followers" to "innovation leaders".
Challenges and risks in mergers and acquisitions
Although A-share companies have made rapid progress in overseas mergers and acquisitions, the challenges in the M&A process cannot be ignored:
1. Cultural and management integration - cross-cultural corporate management is often the biggest problem after mergers and acquisitions. How to make the acquired company and the parent company form a synergy is a problem that many Chinese companies need to solve.
2. Policy and legal barriers - some countries are cautious about foreign capital entering core industries, especially in areas involving technology and data security, which increases the complexity and uncertainty of mergers and acquisitions.
3.Financial risks - high premium mergers and acquisitions may cause excessive financial pressure on enterprises and even cause capital chain problems. For example, a certain A-share company blindly acquired overseas assets, which eventually led to a sharp decline in performance and became a negative example in the market.
In this regard, Goheal reminds companies that in cross-border mergers and acquisitions, they need to conduct a comprehensive assessment of policy risks and financial conditions and formulate a clear integration plan to ensure the success rate of the transaction.
Industry impact behind mergers and acquisitions
This wave of overseas mergers and acquisitions is having a profound impact on the global industrial landscape. Chinese companies have enhanced their voice in the international market through mergers and acquisitions, and at the same time have made the capital market pay more attention to the globalization potential of "Made in China". In the long run, this is not only a reflection of capital flow, but also an important step in the globalization of China's economy.
What do you think of A-share companies' overseas mergers and acquisitions?
A-share companies' layout of the global market through mergers and acquisitions is not only an inevitable choice for corporate development, but also an important step in promoting China's economy to a higher level. Do you think this trend can continue? Which industries will become the next M&A hotspot? Feel free to leave a message in the comment section to share your views. Let’s discuss the future direction of this wave of overseas M&A!
