M&A activity continues in evolving Chinese environment

Chinese M&A Activity will remain an important part of the economic development of the country, although this trend will face a number of challenges such as regulations, government policy and expertise. The volume of outbound and domestic deals is anticipated to grow, although depreciation pressure on the yuan and eroding foreign currency reserves could cause some downside impact on outbound deals. Over 200 Chinese organisations are waiting for local regulatory approval to start new insurance businesses. A few Chinese financial and investment groups are in search for insurance acquisitions both in local and international markets, using the leverage of their investment strength to help insurance companies’ investment returns. Driving Chinese buyers’ M&A activity is the desire to run an international business, as well as the technical skills and experience that the buyer can gain from the acquired insurers in mature markets.