China's M&A deals tipped to rebound in 2013 (2)

Although the number of the Chinese mainland's outbound deals surprisingly showed a small decline to 191 in 2012 from 206 in 2011, deal values grew 54 percent year-on-year to reach a new record high of $65.2 billion, comprising more than a third of overall M&A activity measured by value, by far the highest proportion ever, the report said.

"We see many more deals in the pipeline and expect this growth trend to continue strongly with another record year in 2013," said Edwin Wong, PwC China outbound investment leader.

The report also said private companies took on larger deals and will be the key drivers in the future growth of China outbound M&A activity.

"The growing activity of private-sector buyers in acquiring industrial technologies and consumer-linked businesses overseas is an important trend. Many of these deals are aimed at bringing advanced western technologies, know-how, intellectual property and brands back for use in the Chinese domestic market," Wong said.

The report added that private equity and venture capital firms have emerged as key providers of capital to the liquidity-starved private sector in China.

New deals and exit activity will accelerate strongly from the second quarter of 2013 as pricing expectations adjust, 2012 results become available, initial public offering markets reopen and China's leadership transition takes effect, the report said.

Private equity deal activity - which comprises new investments and exits by both IPOs and M&A - will reach new record highs in 2013 or 2014, it added.