China, UK deals defy 'M&A curse'

The theory of the “M&A curse” has it that the benefits of a deal generally go to the seller, while the buyer’s share price often slides after a deal is done. However, a new study shows that in the case of Chinese companies acquiring UK counterparts, such hoodoo appears to be absent. A sample of 44 Chinese listed companies that bought UK firms between 2012 and 2016 showed that the share price of the acquiring company 10 days before and after the deal announcement recorded a performance that was stronger than overall market dynamics, the Financial Times reports. The findings identify one of the motivators behind rising M&A deal volumes in the UK, which hit a record high in the second quarter of this year with 16 deals announced.