China Deal Watch

Chinese companies have been buying up overseas assets at the fastest pace on record. This graphic, updated weekly, takes a close look at what China is acquiring, and where. The numbers reveal a lot about the country’s growing global ambitions.

On May 8, China’s YTO Express Group Co Ltd agreed to buy On Time Logistics Holdings Ltd for $134 million. Here’s how this deal compares to China’s other overseas acquisitions this year:
Rank 48th largest foreign acquisition by a Chinese company this year
2017 Total $37.1B in foreign mergers and acquisitions
Change -68% from the same period in 2016

Chinese companies are following on from last year’s record acquisition spree, when they announced $249 billion of foreign purchases. The nation’s overseas dealmaking started as a hunt for the raw materials needed to feed steel mills, support industrial production and keep the nation’s factories humming—the so-called old economy.

As China grew, so did its appetite for foreign acquisitions. They’ve shifted focus to acquiring the brands and technology China needs to transition to an economy driven by domestic consumption more than exports, labeled here as the new economy.

As China’s dealmaking exploded, the types of companies it’s buying have changed. That change is easy to spot when you look at the industries of the target companies.

Before 2013, China’s overseas dealmaking was dominated by state-owned companies acquiring iron ore deposits in Australia, energy producers from Canada and copper mines in Africa. More than half of the purchases were of energy and commodities companies. Now private entrepreneurs are snapping up marquee assets like Italian football teams, American film studios and French fashion houses while government-backed buyers purchase chipmakers and crop technology. For a better sense of how China’s targets have changed, let’s look at annual deal volumes by industry.  

Favorite destinations

The charts below show China’s favorite destinations have shifted over time. Every deal of at least $100 million since 2006 is displayed.

Can China keep buying at this speed?

The short answer: yes—unless something gets in the way. The growing number of deals is attracting close government scrutiny within China and around the world. Here are several potential roadblocks that could slow the pace of acquisitions: