Middle East to gain from increased Chinese outbound M&A

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Deloitte Survey Reveals Changing Preferential Moods: From China to the Middle-east 

sinopec china
Sinopec’s HQ in Beijing, China.
The state-owned company recently made the biggest purchase in the Middle East acquiring an interest of almost US$ 3.1 billion in Apache Corp’s Egyptian oil and gas business.

Despite the gloom and doom that overrode most of the global economy in 2013, the Asian economic giant China notched some significant successes as far as its economic activities were concerned. Deloitte recently carried out a survey as a part of its spotlight feature delving into the Chinese investments overseas focusing on mergers and acquisitions.

MORE: Hong Kong-based CTFE buys $1.9bn worth property in Dubai Pearl 

Per the results of a survey carried out by Deloitte to tabulate the course of China’s overseas Mergers and Acquisitions (M&A), it has emerged that Middle East is one of the most preferred location for Chinese investors in certain sectors. These results have also been substantially supported by figures which promise more addition to such overseas M&A’s in the coming few years.

Though survey focused on two key areas – construction and real-estate and resources and energy – primarily, there were a couple of other significant areas that were included in it namely; financial and consumer services sectors. The survey also reflected strong prognostications for these two sectors as well, emphasising an overall positivity for Chinese investors seeking to invest overseas.

The salient points of the survey can be enumerated as thus:

–          Increase of over US$ 12 billion in terms of monetary investment in the Middle-east in 2013 as compared to figures in 2012 for energy and resources and consumer services’ sectors

–          Over US$35 billion invested monetarily in the first half of 2013 in the Middle-east as compared to the figures for the same time period in 2012

–          Increased investment prospects in the Middle-east as compared to previously preferred locations in Europe and Northern America

–          Healthy percentage of respondents (nearly 74%) accounting for credibility in the survey results

Alongside these factors boosting the economic prospects of both China and the Middle-east, yet another important development has been the recent venturing of Sinopec, one of China’s largest oil conglomerates into the Egypt.

Sinopec acquired an interest of almost US$ 3.1 billion in Apache Corp’s Egyptian oil and gas business, marking the state-owned company’s biggest purchase in the Middle East. This move is expected to bring about even more interested Chinese stakeholders into the Middle-east thereby further substantiating the results of the Deloitte Survey.



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