China to Clamp Down on Overseas Acquisitions in 2017, S&P Says
Yicai Global
/SOURCE : Yicai
China to Clamp Down on Overseas Acquisitions in 2017, S&P Says

(Yicai Global) Feb. 3 -- Increased government scrutiny will slow down Chinese cross-border mergers and acquisitions this year, said US ratings agency Standard & Poor's Financial Services LLC.

Chinese companies, including state-owned enterprises, will face tougher regulatory and political hurdles when doing deals overseas, the New York-based company said in a report. The value of China's cross-border mergers and acquisitions rose from USD13 billion to USD72 billion in Europe and from USD5 billion to USD36 billion in the US compared with the previous year, it added.

"Given that outbound acquisitions have principally been credit-fueled, this will have the secondary effect of dampening the appetite for SOEs to make big-ticket acquisitions, and make overseas acquisitions more difficult to complete," S&P said.

The agency expects to take fewer ratings actions on Chinese acquisitions this year.

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