BIZCHINA / Top Biz News
More M&A deals set to occur in China
(Shanghai Daily)
Updated: 2007-02-04 11:25
China is set to see more mergers and acquisitions this year after
emerging as the second-biggest M&A market in Asia Pacific in 2006,
Standard & Poor's said.
A record US$99 billion worth of M&A deals was sealed in China in 2006,
the rating agency said. The country's growing M&A market boosted the
value of transactions in Asia Pacific, excluding Japan, to a record high
of US$385.4 billion, a 50 percent jump over the previous year.
Most of the M&A deals in China in the past year targeted banks, metals,
oil and gas, medical and technology companies. Deals among domestic
companies contributed to more than half of the transactions last year.
Foreign funds flooded into China's M&A market last year as the government
opened more sectors to overseas investments. Even in the banking sector,
where overseas players can only hold a minority stake, several
acquisitions were often heard last year. Overseas investors can hold a
combined 25 percent in a domestic lender while a single investor can only
own 20 percent.
For instance, Banco Bilbao Vizcaya Argentaria SA, the second-biggest
financial group in Spain, agreed to pay 501 million euros (US$650
million) for a five percent stake in China Citic Bank.
"Foreign investors are likely to be drawn to a wide range of sectors in
2007, such as in the retail, service, and consumer-goods markets, where
competition is intense," said the report. "Some of these sectors are
viewed as less strategic to China and are therefore less protected, with
foreign investors able to buy a large or controlling shareholding."
(For more biz stories, please visit Industry Updates)
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