China M&A: ‘Relative normalcy’ from Biden, pent-up demand from coronavirus could reignite Chinese interest in US deals, advisers say

China M&A: ‘Relative normalcy’ from Biden, pent-up demand from coronavirus could reignite Chinese interest in US deals, advisers say

Mergers and acquisitions by Chinese companies seeking deals in the United States, particularly in less politically sensitive sectors, could pick up in 2021 as US President-elect Joe Biden is expected to adopt a more conciliatory tone with Beijing than his predecessor, according to deal advisers.

US-China relations, which have deteriorated to their worst point in decades during Donald Trump’s tenure, pushed China’s 2020 outbound acquisitions to their lowest level since 2007, falling behind inbound transactions for the first time since 2006, according to Refinitiv’s data. Deals into and out of China fell 5.5 per cent last year to US$81.9 billion, following a 40 per cent plunge in 2019.

“The incoming Biden administration is expected to bring a return to relative normalcy, a less confrontational and more globalist approach to international and business relations, and, accordingly, an incrementally positive impact on cross-border deal-making,” said Neil Torpey, chairman of Paul Hastings’ Hong Kong office.

One litmus test for Chinese deals could be the sale of the US operations of Bytedance’s TikTok to a consortium of investors that include Oracle Corp., Walmart, Sequoia Capital, KKR and General Atlantic.