China‘s overseas m&a hotspots target energy and logistics industries

In the first three quarters of this year, the number of overseas mergers and acquisitions of Chinese enterprises in China was 572, amounting to us $97.7 billion, although they were down 14.8 per cent and 38.9 per cent respectively, but still close to 2014 and 2015. In contrast to the explosive growth of 2016, this year the Chinese enterprises went to sea to return to reason. The reason, according to li Ming, a partner at pricewaterhousecoopers‘ overseas acquisition and service, is the introduction of domestic regulatory policies in the past year, as well as the impact of overseas reviews and global macroeconomic uncertainties. But overseas mergers and acquisitions based on corporate strategy development remain stable and are being encouraged by the government, such as state-owned enterprises investing in energy and oil mining as hot spots, compared with the same period last year. 

 

In the first nine months of this year, Chinese enterprises overseas mergers and acquisitions have 21 cases of amount more than $1 billion, including cic‘s $13.8 billion acquisition of British Logicor logistics property, huaxin energy for $9.1 billion to buy a stake in the Russian oil company, etc. From the subject of cross-border mergers and acquisitions, private enterprises trade 359, nearly five times as much as state-owned enterprises, accounting for 63% of the total, roughly equal to last year. However, the growth of overseas mergers and acquisitions in private companies has slowed, and the large number of acquisitions concentrated in high technology in 2016 has not been renewed. At the same time, dominated by financial investors overseas m&a ratio to total number of deals increased year by year, in the first three quarters of this year in the history of the highest 24%, reflecting the financial investors increasingly active in overseas mergers and acquisitions. 

 

From the industry, energy power and logistics industry focus on the large overseas mergers and acquisitions, 2017 years ago in the third quarter ten big acquisitions overseas return "state" and "heavy class" assets/resources, structural rebound in commodity prices and under the influence of OPEC, state-owned enterprises investment in the energy and oil mining become a hot spot. With the popularization of the concept of industry 4.0, the number and amount of merger and acquisition deals related to advanced manufacturing industry have grown, and industrial class has become the common goal of state-owned enterprises and private enterprises. 

 

PWC ZhuangShuQing said: "the overseas merger and acquisition related laws and regulations and the policy of gradually clear and refined, to" go out "for the enterprise to provide guidance and help regarding laws and regulations, effectively avoid overseas investment tax risk, improve the" going out "taxpayers‘ ability to participate in international competition." 

 

Li Ming also believes that China‘s overseas m&a is a good adjustment period in 2017. With the further deepening of supply-side reform and upgrading of domestic industries, overseas m&a will be active in the coming years. China‘s cross-border m&a market is expected to be more reasonable and orderly in 2018, with a new peak by 2020.