4 | The Deloitte M&A Index H1 2015 China emerging as a powerhouse in cross-border M&A Chinese companies are countering the M&A deal flows reflect the shift in China’s slowdown in their economy with a economy from export-oriented to consumption remarkable international expansionary driven. For instance, in the last few years the programme. In 2014, Chinese companies consumer business sector has been steadily announced a record $46.8 billion of increasing as an investment destination, outbound M&A, the highest figure so far overtaking the traditional manufacturing and and more than ten times the amount spent E&R sectors. In fact acquisition volumes in the a decade ago. Europe received the largest E&R sector declined by 10.3% in 2014 over the share of China’s foreign M&A investment previous year. with deal values tripling from $4.1 billion in 2013 to $13.5 billion in 2014. State-owned Another major ongoing shift is the sharp enterprises seeking growth opportunities increase in acquisitions in the TMT sector, abroad received a boost when the regulatory where deal volumes rose by 106% as Chinese approval threshold was raised to $1 billion. companies spent nearly $11 billion on M&A. Deals such as Baidu’s investment in Uber and Lenovo’s acquisition of Motorola Mobility reflect China’s ambitions to acquire technologies and capabilities to drive innovation. 3 Figure 6. Total Chinese outbound M&A volumes by target sector (2013-15 YTD) Deal volumes 70 64 64 64 58 60 53 52 50 46 40 35 31 30 20 16 15 16 14 7 10 10 9 9 10 4 77 4 3 1 0 Consumer Energy & Financial Life Sciences Manufacturing Professional Real Technology, Media Business Resources Services and Healthcare Services Estate and Telecomms 2013 2014 2015 YTD Source: Deloitte analysis based on data from Thomson One Banker 3. China includes Hong Kong (SAR)