China has emerged as the biggest player in a global mergers and acquisitions wave.
So far China has announced $US117 billion of outbound deals in 2016.
Australia has received only $US2.5 billion worth of these deals this year, down on $US8 billion last year.
But analysts at Credit Suisse say there’s good reason why Chinese acquisitions of Australian assets should grow.
“Importantly both governments have eased the requirements for a China/Australia deal,” writes Hasan Tevfik, Peter Liu, Damien Boey and Brendon Ferreira in a note to clients.
“The recent free trade agreement (ChAFTA) will allow bigger acquisitions by Chinese companies without the requirement of FIRB (Foreign Investment Review Board) approval.
“There are clear economic reasons for China Inc to do a deal abroad. Local debt is cheap. Fears of a bigger RMB devaluation linger. Confidence in the local economy seems to be waning. It all suggests Aussie assets will receive more bids, in our view.”
The Credit Suisse analysts have compiled a list of 43 Australian mergers and acquisitions candidates.
Among the companies they identify are Primary Health Care, Nufarm, Syrah and Treasury Wines.
Here’s the full list of potential China targets.
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