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China to Curb Megadeals as Regulators Tame Record Overseas Spree

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China is planning sweeping curbs on its companies’ overseas acquisitions, including barring most foreign investments of $10 billion or more, people with knowledge of the matter said, as it seeks to tame a record dealmaking spree that’s alarmed officials from Washington to Berlin.

The government will generally suspend several categories of deals while still leaving room for some strategic transactions to be executed, the people said, asking not to be identified because the information is private. It will restrict overseas investments of at least $1 billion in industries outside a buyer’s core business, as well as foreign property deals of $1 billion or more by state-owned enterprises, according to the people.

The curbs will last until the end of September 2017, the people said, adding that the rationale for the measures wasn’t explained in detail. Regulators will pay extra attention to deals by highly leveraged firms and companies with poor return on assets, according to the people.

Chinese firms this...