Based on SmithStreetSolutions’ M&A data for Q1 2010, there were a total of 23 announced outbound deals a jump of 53% from the same quarter Outbound M&A deals, last year. Of those, 21 deals disclosed their M&A value, which amounted to a total of USD 9.0 billion. Overall deal volume is expected to continue increasing in 2010 as cash rich Chinese firms prepare to expand globally.

The technology, media, telecommunications (TMT) sector saw a significant amount of outbound deal flow since the beginning of the year. Most of the deals were technology-driven, due to the release of a number of critical central government policies last year that have quickened the approval process for transactions that involve foreign R&D acquisition and integration. There were also two deals targeting online gaming companies, which is an indicator of the strong growth in China’s online entertainment market.

China’s thirst for natural resources is still the main force behind the larger deals this quarter. The energy sector continues to dominate the outbound M&A market with a total of 6 deals valued at USD 6.8 billion. Most nancy.smithstreetsolutions.+86 (21) 6565-6535 office noteworthy were the USD 3.2 billion acquisition of the Australian firm Arrow Energy by PetroChina and Royal Dutch as well as the USD 3.1 billion purchase for a 50% stake in Argentina-based Bridas Corp. by China National Offshore Oil Corp. (CNOOC).

The majority of the deals in the first quarter targeted firms in the Asia Pacific region, namely 11 transactions or 48% of the total. Australia was the primary destination for oil and mineral needs, which accounted for a large part of the M&A activity in the region. North America came in second in terms of volume, 7 transactions or 30% of the total, primarily consisting of technology acquisitions in the US.