China Transactions Insights – Early Winter 2019

The surge in U.S. IPO activity for Chinese companies that started in 2017 continued into 2018 and this year, with 37 companies completing IPOs for a total of US$8.7 billion in funds raised during 2018 and 14 IPOs for total funds raised of US$1.3 billion for the first five months of 2019.

U.S. initial public offering (IPO) activity for Chinese companies remains strong but below 2018 levels, with 31 companies completing IPOs for total funds raised of US$3.2 billion for the first 11 months of 2019, compared to 37 IPOs for a total of US$8.7 billion in funds raised for full-year 2018.1

As of November 2019, there were 196 China-based companies listed on the Nasdaq, NYSE and AMEX. U.S.-listed Chinese companies represent over US$1 trillion in total market capitalization, with many of the largest companies active in pursuing investments, acquisitions and other transactions both in China and outside its borders.1

While going-private transaction activity for U.S.-listed companies based in China remains well below the peak level seen in 2016, there has been an uptick in 2019 deal activity versus last year. During the first 11 months of 2019, three previously announced going-private transactions closed, and seven new transactions were announced.1

China’s overall outbound investment activity has been relatively stable, but Chinese M&A activity in the U.S. remains significantly lower than pre-2018 levels amid persisting trade tensions and stricter government policies.

Uncertainty remains for global businesses and markets as the trade dispute between the United States and China approaches its second anniversary. However, recent trade negotiations and the announcement of a “Phase One” agreement indicate that progress is likely being made in resolving key issues and reducing trade tensions.

China Transactions Insights – Early Winter 2019

 

Source
1 SEC filings, company press releases and S&P Global Market Intelligence as of November 29, 2019

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