China, Canada, and Capital Controls…The Impact on Cross-Border M&A

Posted By: Karen Fisman

Over the past couple of years, Chinese outbound M&A has reached record high levels, hitting a peak of US$227 billion in 2016, and more than doubling its 2015 level.  In November 2016, the Chinese State Council announced that new capital controls would be put in place, effective January 2017, to reduce this outflow of currency.

Chinese investment in Canada differs from the global pattern.  Deal activity peaked in 2012, with China taking first place in the rankings of inbound M&A, but dropped off in subsequent years as commodity prices fell.  In 2016, however, Chinese inbound deal activity in Canada was back in the top three, ranking by value behind the U.S. and the U.K..

We were curious about whether the new Chinese capital controls were impacting Chinese M&A activity in Canada, and were fortunate to speak with Chris Flood, counsel at Blakes, who has extensive experience advising Chinese corporate and financial investors on M&A transactions in Canada.  

Please click on “Open in Browser” for Chris’s insights, and to read our full article.

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