The Middle East is expected to receive a sizeable amount of outbound M&A deals from China in 2014, according to a new survey by Deloitte.
“Respondents are more optimistic about the China outbound M&A landscape than they were 12 months ago” said James Babb, clients & industries leader, and responsible for the China Services Group at Deloitte Middle East.
“A cumulative 74 per cent of respondents believe that activity will increase over the coming 12 months, whereas when interviewed the same time last year, just two-thirds of respondents answered similarly.”
Around 63 per cent of respondents surveyed expected the consumer and transportation sector in the Middle East to receive a sizeable number of outbound Chinese M&A investments. The energy and resources sector, real estate, construction and financial services are other top sectors that would see a rising investor interest from China this year.
Less than 10 per cent of the respondents expect investments in the technology, media and telecommunications sector (TMT), life sciences and healthcare, and manufacturing in the region.
Chinese investor confidence in the regional economy has been improving in the last few years.
“China’s oil giant Sinopec acquiring a $3.1 billion stake in Apache Egypt assets is one of the latest examples of growing China’s interest to directly invest in the Middle East region,” said Babb.
Last year, the regional arm of China Estate Construction Engineering Corporation (CSCEC), announced an investment in Skai Holdings’ hotel development Viceroy Dubai Palm Jumeirah. The investment is said to be the builder’s first in the region.
The Industrial and Commercial Bank of China (ICBC), which is China’s largest bank, arranged the financing for the hotel project, marking its first deal for a hospitality project in the Middle East.