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Increased Chinese Presence and Other Developments in the Southeast Asian Cross-Border M&A Landscape

Sep 06, 2017

Chinese acquisitions in Southeast Asia have recovered and have even outpaced the previous streak of Chinese cross-border deals from 2011 to 2014. A consortium of largely Chinese enterprises sponsored many of the acquisitions. Following this development, in the summer of 2017, Chinese regulators began tightening capital controls. While signaling a more disapproving stance toward large overseas acquisitions, the new regulation’s effects remain to be seen.

Chinese buyers participated in four of the six largest cross-border private equity deals in Southeast Asia from 2014 through July 2017.

Overall, M&A flows into the Association of Southeast Asian Nations (ASEAN) are growing. When measured as a share of the region’s overall GDP, they have kept pace with the growth of the region’s GDP. In 2016, M&A deals amounted to 0.7 percent of ASEAN GDP.

Thailand made four major acquisitions in Vietnam totaling about $2.8 billion. These were Thailand's first major acquisitions in any of its developing country neighbors and Vietnam’s first large deal from any acquirer country.

Thailand’s significant push into Vietnam offers a glimpse at what may be to come as a broader set of ASEAN countries is expanding intra-regional cross-border M&A flows. More investment flows within Southeast Asia would allow the region to lessen its dependence on major advanced economies and could mitigate potential restrictions to capital outflows due to political developments in China.