China Global M&A Push, 2005 ~ Nowadays
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Shotgunner51
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Awesome development!!
Thanks! Chinese tend to acquire industrial, infra/utility, and financial assets (like this leasing firm which strategically benefits Chinese supply chain), what about Japanese according to your observation?
Another sample of industrial M&A
ChemChina, Camfin to launch tender offer for rest of Pirelli
TaiShang
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CHINA M&A ACTIVITY IN THE FIRST HALF OF 2015 SURGES; TRANSACTION VALUE SETS RECORD
By CFO Innovation Asia Staff | Friday, August 21, 2015 - 10:29
Booming stock markets, consolidation across sectors and ongoing reform of State-owned Enterprises (SOEs) combined to produce a record first half of 2015 for M&A business in China. Domestic (intra-China) M&A continued to be the main driver behind the China M&A growth story – it was up 60% by value on the previous six months.
The value of private equity deals also grew strongly (+62%). The total number of transactions – at 4,559 – was 10% higher than the record levels achieved in the second half of 2014.
“The hottest sectors for domestic and foreign inbound deals have been technology, financial services and real estate,” says David Brown, PwC China and Hong Kong Transaction Services Leader.
“There are a number of drivers behind this. The Chinese government is looking to technology and innovation to transform its economy. Real estate developers have been in need of fresh capital. And financial services have had to adapt to meet the growing needs of local retail and SME markets.”
Private Equity M&A achieved record growth on the back of what has been a buoyant A-share market. Technology – especially internet-related plays – has been one of the main focus.
With soaring stock market valuations, IPOs have been the dominant exit route. As A-share multiples have now cooled considerably, this window may close, says PCW. The cumulative overhang of investments over exits will persist.
China outbound M&A
China outbound M&A also reached new heights. The number of deals increased 17% to hit a record of 174 deals for the half year. Their value was up by 24%. As in previous periods, POEs dominated: they were up 50% by deal volume and jumped 148% by value.
“POEs are looking overseas primarily for new products and technologies that they can bring back to their domestic market as it becomes more and more driven by consumer demand,” says Brown. “But these deals are also a way to expand into new markets. Australia and Asia are often the first steps for businesses that are transforming into multinationals.”
The M&A Mid-year Review and Outlook concludes that, while 2015 looks set to be a record year overall, M&A activity may slow slightly due to uncertainties in the equity markets.
Technology is likely to remain very active – partly because of continued strong government backing. But transactions will also be driven by sector consolidation and the M&A growth strategies established by industry leaders, such as Baidu, Alibaba and Tencent.
PwC also notes that transactions involving listed companies may be reduced because of questions over pricing levels, though foreign inbound M&A is likely to be less affected. Outbound M&A will keep expanding as a growing cadre of experienced mainland Chinese purchasers continue to seek out overseas assets.
The closure of the A-share markets, meanwhile, will also bring some benefits to PEs looking for investment opportunities as SMEs seek alternative sources of equity capital.
By CFO Innovation Asia Staff | Friday, August 21, 2015 - 10:29
Booming stock markets, consolidation across sectors and ongoing reform of State-owned Enterprises (SOEs) combined to produce a record first half of 2015 for M&A business in China. Domestic (intra-China) M&A continued to be the main driver behind the China M&A growth story – it was up 60% by value on the previous six months.
The value of private equity deals also grew strongly (+62%). The total number of transactions – at 4,559 – was 10% higher than the record levels achieved in the second half of 2014.
“The hottest sectors for domestic and foreign inbound deals have been technology, financial services and real estate,” says David Brown, PwC China and Hong Kong Transaction Services Leader.
“There are a number of drivers behind this. The Chinese government is looking to technology and innovation to transform its economy. Real estate developers have been in need of fresh capital. And financial services have had to adapt to meet the growing needs of local retail and SME markets.”
Private Equity M&A achieved record growth on the back of what has been a buoyant A-share market. Technology – especially internet-related plays – has been one of the main focus.
With soaring stock market valuations, IPOs have been the dominant exit route. As A-share multiples have now cooled considerably, this window may close, says PCW. The cumulative overhang of investments over exits will persist.
China outbound M&A
China outbound M&A also reached new heights. The number of deals increased 17% to hit a record of 174 deals for the half year. Their value was up by 24%. As in previous periods, POEs dominated: they were up 50% by deal volume and jumped 148% by value.
“POEs are looking overseas primarily for new products and technologies that they can bring back to their domestic market as it becomes more and more driven by consumer demand,” says Brown. “But these deals are also a way to expand into new markets. Australia and Asia are often the first steps for businesses that are transforming into multinationals.”
The M&A Mid-year Review and Outlook concludes that, while 2015 looks set to be a record year overall, M&A activity may slow slightly due to uncertainties in the equity markets.
Technology is likely to remain very active – partly because of continued strong government backing. But transactions will also be driven by sector consolidation and the M&A growth strategies established by industry leaders, such as Baidu, Alibaba and Tencent.
PwC also notes that transactions involving listed companies may be reduced because of questions over pricing levels, though foreign inbound M&A is likely to be less affected. Outbound M&A will keep expanding as a growing cadre of experienced mainland Chinese purchasers continue to seek out overseas assets.
The closure of the A-share markets, meanwhile, will also bring some benefits to PEs looking for investment opportunities as SMEs seek alternative sources of equity capital.
cirr
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China's Tsinghua Buys Western Digital Stake for $3.8 Billion
Tim Culpan
September 30, 2015 — 8:02 AM EDT
Updated on September 30, 2015 — 8:32 AM EDT
Tsinghua Unisplendour Corp., a business unit of Tsinghua University, agreed to pay $3.8 billion for 15 percent of hard drive maker Western Digital Corp., as Chinese companies continue their pursuit of foreign technology corporations.
Western Digital will issue new shares in the transaction and sell them at $92.50 apiece, or 33 percent higher than the Irvine, California-based company’s last close. The stock climbed to as high as $79 in pre-market trading, up 14 percent from Tuesday.
The Western Digital purchase marks Unisplendour’s biggest acquisition this year after agreeing in May to pay $2.3 billion for a controlling stake in Hewlett-Packard Co.’s local server venture. Tsinghua, one of China’s most prestigious universities, was also interested in buying U.S. memory-chip maker Micron Corp. through its Tsinghua Unigroup unit, people familiar with the matter have said. Tsinghua had already purchased U.S.-listed Spreadtrum Communications Inc. and RDA Microelectronics Inc.
Unisplendour will have the right to nominate one person to Western Digital’s board, and its shares in the company will be subject to a five-year lockup. The right to a board seat would be terminated if its shareholding falls below 10 percent, the companies said in a statement.
Western Digital will use the cash to strengthen its balance sheet and pursue long-term strategic growth initiatives, it said.
China's Tsinghua Buys Western Digital Stake for $3.8 Billion - Bloomberg Business
Tim Culpan
September 30, 2015 — 8:02 AM EDT
Updated on September 30, 2015 — 8:32 AM EDT
Tsinghua Unisplendour Corp., a business unit of Tsinghua University, agreed to pay $3.8 billion for 15 percent of hard drive maker Western Digital Corp., as Chinese companies continue their pursuit of foreign technology corporations.
Western Digital will issue new shares in the transaction and sell them at $92.50 apiece, or 33 percent higher than the Irvine, California-based company’s last close. The stock climbed to as high as $79 in pre-market trading, up 14 percent from Tuesday.
The Western Digital purchase marks Unisplendour’s biggest acquisition this year after agreeing in May to pay $2.3 billion for a controlling stake in Hewlett-Packard Co.’s local server venture. Tsinghua, one of China’s most prestigious universities, was also interested in buying U.S. memory-chip maker Micron Corp. through its Tsinghua Unigroup unit, people familiar with the matter have said. Tsinghua had already purchased U.S.-listed Spreadtrum Communications Inc. and RDA Microelectronics Inc.
Unisplendour will have the right to nominate one person to Western Digital’s board, and its shares in the company will be subject to a five-year lockup. The right to a board seat would be terminated if its shareholding falls below 10 percent, the companies said in a statement.
Western Digital will use the cash to strengthen its balance sheet and pursue long-term strategic growth initiatives, it said.
China's Tsinghua Buys Western Digital Stake for $3.8 Billion - Bloomberg Business
cirr
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Western Digital sells strangely limited 15 per cent stake to China
Nothing to do with the MOFCOM hold on the HGST merger. Nope
China pays Western Digital's wall-crossing fee
30 Sep 2015 at 12:59, Chris Mellor
In a transaction said to be unconnected to the HGST-WD merger – still becalmed by Chinese watchdog MOFCOM – Western Digital is selling a 15 per cent stake to a subsidiary of China-based Unisplendour Corporation (Unis) for $3.8bn.
Western Digital said: “Unis is a respected, publicly-traded Chinese company. It has been trading on the Shenzhen exchange since 1999, with its largest single shareholders being Tsinghua University and its subsidiaries.”
MOFCOM is the Chinese state regulatory agency and it is holding up the full integration of WD and its acquired HGST subsidiary because of competition concerns.
Western Digital emphasised: “This announcement does not have any relation to the long-awaited decision from MOFCOM on the possible integration of HGST.”
Oh yes? Well, common sense says it’s hardly likely to hinder the MOFCOM decision should it go in WD’s favour.
Unis will buy newly issued shares at $92.50/share, a 34 per cent premium when compared with yesterday’s closing price of $68.87/share. It will nominate a director to sit on WD’s board – who is required to vote with the rest of WD’s board and cannot vote on government-related issues in a five-year standstill agreement.
Western Digital's president and CEO Steve Milligan said: "The equity investment by Unis will help facilitate our growth as we look to capitalise on the many opportunities and changes within the global storage industry.”
In a companion canned quote, Weiguo Zhao, chairman of Tsinghua Unigroup and Unisplendour Corporation, said: "We are excited to establish a relationship with Western Digital, a leading company in the storage industry with a capable and talented management team and workforce. We believe this long-term investment will serve as a constructive collaboration model for Chinese and US companies to work together for success.”
Unis has form in linking financially with US IT suppliers. It acquired a 51 per cent stake worth $2.3bn in HP’s H3C Technologies and HP’s China-based server, storage, and technology services businesses in May 2015. Earlier, in September 2014, Intel invested $1.5bn in a 20 per cent equity stake in Unis.
The Unis-WD transaction is expected to close in 1Q16. No shareholder vote is required. We wouldn’t be at all surprised if MOFCOM OKs the WD-HGST merger in fairly short order.
Check out a FAQ on the Unis investment here. It states “Unis will not have any day-to-day or operational control over Western Digital, nor will it control, own or manage Western Digital IP or technology.” ®
Western Digital sells strangely limited 15 per cent stake to China • The Register
Nothing to do with the MOFCOM hold on the HGST merger. Nope
China pays Western Digital's wall-crossing fee
30 Sep 2015 at 12:59, Chris Mellor
In a transaction said to be unconnected to the HGST-WD merger – still becalmed by Chinese watchdog MOFCOM – Western Digital is selling a 15 per cent stake to a subsidiary of China-based Unisplendour Corporation (Unis) for $3.8bn.
Western Digital said: “Unis is a respected, publicly-traded Chinese company. It has been trading on the Shenzhen exchange since 1999, with its largest single shareholders being Tsinghua University and its subsidiaries.”
MOFCOM is the Chinese state regulatory agency and it is holding up the full integration of WD and its acquired HGST subsidiary because of competition concerns.
Western Digital emphasised: “This announcement does not have any relation to the long-awaited decision from MOFCOM on the possible integration of HGST.”
Oh yes? Well, common sense says it’s hardly likely to hinder the MOFCOM decision should it go in WD’s favour.
Unis will buy newly issued shares at $92.50/share, a 34 per cent premium when compared with yesterday’s closing price of $68.87/share. It will nominate a director to sit on WD’s board – who is required to vote with the rest of WD’s board and cannot vote on government-related issues in a five-year standstill agreement.
Western Digital's president and CEO Steve Milligan said: "The equity investment by Unis will help facilitate our growth as we look to capitalise on the many opportunities and changes within the global storage industry.”
In a companion canned quote, Weiguo Zhao, chairman of Tsinghua Unigroup and Unisplendour Corporation, said: "We are excited to establish a relationship with Western Digital, a leading company in the storage industry with a capable and talented management team and workforce. We believe this long-term investment will serve as a constructive collaboration model for Chinese and US companies to work together for success.”
Unis has form in linking financially with US IT suppliers. It acquired a 51 per cent stake worth $2.3bn in HP’s H3C Technologies and HP’s China-based server, storage, and technology services businesses in May 2015. Earlier, in September 2014, Intel invested $1.5bn in a 20 per cent equity stake in Unis.
The Unis-WD transaction is expected to close in 1Q16. No shareholder vote is required. We wouldn’t be at all surprised if MOFCOM OKs the WD-HGST merger in fairly short order.
Check out a FAQ on the Unis investment here. It states “Unis will not have any day-to-day or operational control over Western Digital, nor will it control, own or manage Western Digital IP or technology.” ®
Western Digital sells strangely limited 15 per cent stake to China • The Register
TaiShang
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Record 257 M&A deals secured
By Ye Zhen | October 29, 2015, Thursday |
CHINESE mainland enterprises sealed a record 257 merger and acquisition deals in the first three quarters of 2015, surpassing the total for the whole of last year, a report showed yesterday.
The number of M&A deals surged 46 percent from the same period of last year while the deal value rose just 5 percent year on year to US$45.1 billion, PricewaterhouseCoopers said in the report.
PwC attributed the increase to the Chinese government actively facilitating outbound investment and a favorable market environment.
“From a financing perspective, easy monetary policies, low interest rates and reserve ratios, and a significant surge in China’s stock markets in the first half of 2015 have helped to drive deals,” said Andrew Li, PwC China advisory services leader.
Listed companies led the mainland’s outbound M&A deals, with the number of deals sealed by them taking up 62 percent of the total in the first three quarters, data showed.
Privately owned enterprises continued to be a key driver as they sealed 167 deals, more than three times that of state-owned enterprises for the period.
“Privately owned enterprises’ outbound activities covered a wide range of sectors with investors searching overseas manufacturers with advanced technology, consumer companies with brand and customer assets and media and entertainment companies with focus on lifestyle improvement,” Li noted.
SOEs sealed US$23 billion in M&As due to mega deals, compared with US$14.5 billion for private companies, the report said.
PwC predicted outbound M&A activities will continue in the fourth quarter and next year.
By Ye Zhen | October 29, 2015, Thursday |
CHINESE mainland enterprises sealed a record 257 merger and acquisition deals in the first three quarters of 2015, surpassing the total for the whole of last year, a report showed yesterday.
The number of M&A deals surged 46 percent from the same period of last year while the deal value rose just 5 percent year on year to US$45.1 billion, PricewaterhouseCoopers said in the report.
PwC attributed the increase to the Chinese government actively facilitating outbound investment and a favorable market environment.
“From a financing perspective, easy monetary policies, low interest rates and reserve ratios, and a significant surge in China’s stock markets in the first half of 2015 have helped to drive deals,” said Andrew Li, PwC China advisory services leader.
Listed companies led the mainland’s outbound M&A deals, with the number of deals sealed by them taking up 62 percent of the total in the first three quarters, data showed.
Privately owned enterprises continued to be a key driver as they sealed 167 deals, more than three times that of state-owned enterprises for the period.
“Privately owned enterprises’ outbound activities covered a wide range of sectors with investors searching overseas manufacturers with advanced technology, consumer companies with brand and customer assets and media and entertainment companies with focus on lifestyle improvement,” Li noted.
SOEs sealed US$23 billion in M&As due to mega deals, compared with US$14.5 billion for private companies, the report said.
PwC predicted outbound M&A activities will continue in the fourth quarter and next year.
TaiShang
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Alibaba announces SCMP acquisition
By Xiao Xie Source:Global Times Published: 2015-12-12 0:58:01
Alibaba Group, China's largest online retailer, announced on Friday that it has entered into an agreement to acquire the South China Morning Post (SCMP), one of Hong Kong's largest newspapers, and other media assets of SCMP Group.
According to an announcement published on Alibaba's website on Friday, the agreement combines the "heritage and editorial excellence of the SCMP with Alibaba's digital expertise to provide comprehensive and insightful news and analysis of the big stories in Hong Kong and Chinese mainland."
Talking about Alibaba's vision for the SCMP, Joseph Tsai, executive vice chairman of Alibaba Group, said in the announcement that the company will eliminate "the paywall" on the scmp.com to allow free access to its content some time after the takeover.
Some have suggested that ownership by Alibaba will compromise the SCMP's editorial independence, which reflects a bias of its own, Tsai said in a letter to SCMP readers.
"These day-to-day editorial decisions will be driven by editors in the newsroom, not in the corporate boardroom," Tsai remarked.
Apart from the flagship South China Morning Post newspaper, the agreement also includes the acquisition of the magazine, recruitment, outdoor media and digital media businesses of the SCMP.
Liu Dingding, an analyst from Beijing-based Internet intelligence agency Sootoo, told the Global Times on Friday that one of Alibaba's strategies in recent years has been to develop a comprehensive "media network" including newspapers, movies and other entertainment industries. He said media outlet sina.com could be its next target.
***
Mr. Ma Yun is a great patriot of China and this is a very critical investment. Great news to close the year.
By Xiao Xie Source:Global Times Published: 2015-12-12 0:58:01
Alibaba Group, China's largest online retailer, announced on Friday that it has entered into an agreement to acquire the South China Morning Post (SCMP), one of Hong Kong's largest newspapers, and other media assets of SCMP Group.
According to an announcement published on Alibaba's website on Friday, the agreement combines the "heritage and editorial excellence of the SCMP with Alibaba's digital expertise to provide comprehensive and insightful news and analysis of the big stories in Hong Kong and Chinese mainland."
Talking about Alibaba's vision for the SCMP, Joseph Tsai, executive vice chairman of Alibaba Group, said in the announcement that the company will eliminate "the paywall" on the scmp.com to allow free access to its content some time after the takeover.
Some have suggested that ownership by Alibaba will compromise the SCMP's editorial independence, which reflects a bias of its own, Tsai said in a letter to SCMP readers.
"These day-to-day editorial decisions will be driven by editors in the newsroom, not in the corporate boardroom," Tsai remarked.
Apart from the flagship South China Morning Post newspaper, the agreement also includes the acquisition of the magazine, recruitment, outdoor media and digital media businesses of the SCMP.
Liu Dingding, an analyst from Beijing-based Internet intelligence agency Sootoo, told the Global Times on Friday that one of Alibaba's strategies in recent years has been to develop a comprehensive "media network" including newspapers, movies and other entertainment industries. He said media outlet sina.com could be its next target.
***
Mr. Ma Yun is a great patriot of China and this is a very critical investment. Great news to close the year.
Shotgunner51
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I believe Joseph Tsai (蔡崇信) is the man behind this remarkable deal, as always, called "Billionaire Rainmaker" by Bloomberg. This deal with Kuok Hock Nien (郭鹤年) on acquiring SCMP should be part of Tsai's grand plan to build a global media arm for the Alibaba group.
On the other hand, SCMP is relatively a very small unit within Kuok's multinational business empire which covers a wide array of industries/sectors. I don't see any plan from Kuok on expanding media business.
It's a fair business deal between the two tycoons.
P.S.:
Joseph Tsai (蔡崇信). Taiwan-born, law degrees from Yale University, career banker before joining hands with Ma Yun in making Alibaba an e-commerce empire, now his estimated personal net worth $7.4 billion. He is married to Clara Ming-Hua Wu, a granddaughter of Wu San-Lien, the former mayor of Taipei City. Clara graduated from Stanford University where she studied international relations, she also had an MBA degree from Harvard Business School. They reside in Hong Kong.
Global Times delivered an op-ed piece about the deal:
Alibaba’s SCMP acquisition twisted in political lens
By Liu Zhun Source:Global Times Published: 2015-12-14 0:03:01
Alibaba's march in the media industry is growing ambitious. On Friday, the Chinese Internet giant announced it is to acquire the media assets of the SCMP Group, including one of the most influential English language newspapers based in Hong Kong, the South China Morning Post (SCMP). The SCMP is a daily newspaper that shares typical Western values and perspectives in media coverage.
The acquisition raised a debate about whether Alibaba, a Chinese mainland enterprise, will jeopardize the independence and objectivity of the newspaper. Alibaba confirmed that the Chinese government had no role in the deal, and Joseph Tsai, Alibaba's executive vice chairman, said the newspaper will continue to run "on principles," and "editors make their judgment on what to publish and not to publish."
However, Alibaba also admitted that the acquisition serves an important purpose of improving China's image, considering the fact that China is always observed by Western media through a biased lens. Some of their negative, exaggerated and even groundless reports about China have bred misconceptions, which have impacted Alibaba's interests.
From a business perspective, Alibaba's acquisition of the SCMP is no different from Amazon taking over the Washington Post. Through cooperation, Internet companies desire sustainable prosperity by using traditional media's established leverage and channels, while traditional media hope they could survive in its winter and reverse the downfall in a digital era.
Alibaba's advance in the media industry is part of the trend, and it could be anticipated that more Chinese companies will step into this market.
In the past decades, China has been requested by the Western hemisphere to be more open-minded and engaged in global competition. Now, confronted with more dynamic Chinese companies embracing the world in various dimensions, the West should focus on business-oriented competition, instead of conjuring up politically-driven schemes. Concerns with ulterior motives are disrespectful to the efforts of Chinese companies.
As Alibaba said, misunderstandings about China are rife in Western discourse. They can hardly be eliminated overnight. The blossoming of Chinese companies is related to China's multifaceted mode of development, which needs to be illustrated fairly to the outside. In this process, the media helps a lot.
It is perhaps more productive if the West could look at Alibaba's acquisition and future operation of the SCMP from a constructive angle. Alibaba will not only reinvigorate the newspaper without putting its reputation and survival in peril as it pledged, but also tailor it to be a window to more balanced and complicated portraits of what is happening in China. The rest of the world can benefit from a true understanding of China.
Alibaba’s SCMP acquisition twisted in political lens - Global Times
Alibaba’s SCMP acquisition twisted in political lens
By Liu Zhun Source:Global Times Published: 2015-12-14 0:03:01
Alibaba's march in the media industry is growing ambitious. On Friday, the Chinese Internet giant announced it is to acquire the media assets of the SCMP Group, including one of the most influential English language newspapers based in Hong Kong, the South China Morning Post (SCMP). The SCMP is a daily newspaper that shares typical Western values and perspectives in media coverage.
The acquisition raised a debate about whether Alibaba, a Chinese mainland enterprise, will jeopardize the independence and objectivity of the newspaper. Alibaba confirmed that the Chinese government had no role in the deal, and Joseph Tsai, Alibaba's executive vice chairman, said the newspaper will continue to run "on principles," and "editors make their judgment on what to publish and not to publish."
However, Alibaba also admitted that the acquisition serves an important purpose of improving China's image, considering the fact that China is always observed by Western media through a biased lens. Some of their negative, exaggerated and even groundless reports about China have bred misconceptions, which have impacted Alibaba's interests.
From a business perspective, Alibaba's acquisition of the SCMP is no different from Amazon taking over the Washington Post. Through cooperation, Internet companies desire sustainable prosperity by using traditional media's established leverage and channels, while traditional media hope they could survive in its winter and reverse the downfall in a digital era.
Alibaba's advance in the media industry is part of the trend, and it could be anticipated that more Chinese companies will step into this market.
In the past decades, China has been requested by the Western hemisphere to be more open-minded and engaged in global competition. Now, confronted with more dynamic Chinese companies embracing the world in various dimensions, the West should focus on business-oriented competition, instead of conjuring up politically-driven schemes. Concerns with ulterior motives are disrespectful to the efforts of Chinese companies.
As Alibaba said, misunderstandings about China are rife in Western discourse. They can hardly be eliminated overnight. The blossoming of Chinese companies is related to China's multifaceted mode of development, which needs to be illustrated fairly to the outside. In this process, the media helps a lot.
It is perhaps more productive if the West could look at Alibaba's acquisition and future operation of the SCMP from a constructive angle. Alibaba will not only reinvigorate the newspaper without putting its reputation and survival in peril as it pledged, but also tailor it to be a window to more balanced and complicated portraits of what is happening in China. The rest of the world can benefit from a true understanding of China.
Alibaba’s SCMP acquisition twisted in political lens - Global Times
TaiShang
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Zoomlion offers US$3.2b for US heavy machinery maker
China Daily, January 28, 2016
Chinese machinery maker Zoomlion. [Xinhua]
China's Zoomlion Heavy Industry Science & Technology Co confirmed on Wednesday an unsolicited takeover bid for Terex Corp, the US crane and construction machinery maker.
The deal will be vital to Zoomlion's transformation and the implementation of the company's global strategy, and it will help increase Zoomlion's revenue and profits.
According to a Terex statement, Zoomlion has offered $30 per share for the company, valuing it at $3.2 billion.
The offer is twice Terex's stock price on Monday, which closed at $15.01 per share in New York. The shares surged 37 percent on Tuesday to $20.5, pushing its market capitalization to $2.2 billion.
The Terex board said it is carefully reviewing the Zoomlion proposal to determine what course of action is in the best interests of its shareholders.
Before the Zoomlion offer, Terex had agreed to merge with Finland equipment manufacturer Konecranes to create a crane and materials handling supplier with a combined $10 billion in sales. After the merger, the company planned to change its name into Konecranes Terex Plc and move its base to Finland.
Founded in 1992, Zoomlion is mainly engaged in manufacturing high-tech equipment for the agricultural, building, energy, environmental, and transport-engineering sectors.
The first mainland construction machinery company to be listed on both the Shanghai and Hong Kong stock exchanges, Zoomlion has manufacturing bases in Italy, Germany, India and Brazil.
China's equipment manufacturing industry was hit hard by China's economic slowdown last year. During the first half of the year, the 18 major listed construction machinery firms reported combined operational revenue of 50 billion yuan ($7.58 billion), a 29.31 percent fall on the same period in 2014.
"China's equipment manufacturing sector is in the mid- to downstream of the global production chain," said Chen Chaofan, an economics professor with the School of Economics and Resource Management at Beijing Normal University.
"It needs to learn from developed countries in terms of technology and expertise and overseas purchase is a good way to strengthen production capacity," Chen said.
China Daily, January 28, 2016
China's Zoomlion Heavy Industry Science & Technology Co confirmed on Wednesday an unsolicited takeover bid for Terex Corp, the US crane and construction machinery maker.
The deal will be vital to Zoomlion's transformation and the implementation of the company's global strategy, and it will help increase Zoomlion's revenue and profits.
According to a Terex statement, Zoomlion has offered $30 per share for the company, valuing it at $3.2 billion.
The offer is twice Terex's stock price on Monday, which closed at $15.01 per share in New York. The shares surged 37 percent on Tuesday to $20.5, pushing its market capitalization to $2.2 billion.
The Terex board said it is carefully reviewing the Zoomlion proposal to determine what course of action is in the best interests of its shareholders.
Before the Zoomlion offer, Terex had agreed to merge with Finland equipment manufacturer Konecranes to create a crane and materials handling supplier with a combined $10 billion in sales. After the merger, the company planned to change its name into Konecranes Terex Plc and move its base to Finland.
Founded in 1992, Zoomlion is mainly engaged in manufacturing high-tech equipment for the agricultural, building, energy, environmental, and transport-engineering sectors.
The first mainland construction machinery company to be listed on both the Shanghai and Hong Kong stock exchanges, Zoomlion has manufacturing bases in Italy, Germany, India and Brazil.
China's equipment manufacturing industry was hit hard by China's economic slowdown last year. During the first half of the year, the 18 major listed construction machinery firms reported combined operational revenue of 50 billion yuan ($7.58 billion), a 29.31 percent fall on the same period in 2014.
"China's equipment manufacturing sector is in the mid- to downstream of the global production chain," said Chen Chaofan, an economics professor with the School of Economics and Resource Management at Beijing Normal University.
"It needs to learn from developed countries in terms of technology and expertise and overseas purchase is a good way to strengthen production capacity," Chen said.
JSCh
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M&A activity hits record high in China
China Daily, January 27, 2016
Mergers and acquisitions hit a record high level in China last year, rising 37 percent year-on-year, a new report has revealed.
Global auditing firm PricewaterhouseCoopers said 9,420 deals were completed during 2015, worth $733.7 billion, which marked an 84 percent increase in value.
George Lu, PwC China's transaction services partner, said the firm also expects M&A activity this year again to be brisk, growing at similar double-digit pace.
The company's latest figures show the number of domestic strategic M&As grew strongly, driven by the ongoing economic transformation, sector consolidation, restructuring and bold inorganic growth strategies.
Technology and financial services were particularly attractive sectors, he said, mainly due to higher growth expectations for the technology sector, as well as some industry consolidation.
The levels of capital being raised, and the significant pace of development by financial services and online payments operations in China also contributed.
Outbound activity also grew 40 percent by volume and 21 percent by value, both new highs.
The private sector led the charge, but financial buyers and private equity investors were also very active, as State-owned enterprises remained largely subdued.
"In 2015 we saw a continuation of the outbound trend, with strategic buyers pursuing inorganic growth strategies and seeking technologies and brands to bring back to the China market, as well as significant participation from PEs and financial buyers acquiring overseas assets with a China angle," said Lu.
"There were 40 percent more outbound deals in 2015, and I believe we will see this kind of rate of growth for the next few years as Chinese-led multinational corporations start to emerge on the global stage."
The report also showed private equity and financial investor deals increasing 79 percent by deal volume and 169 percent by deal value.
Domestic investors were especially active, although the focus on domestic A-Share markets as an exit route made it a tougher environment for foreign PEs.
Leon Qian, PwC' transaction services northern China leader, said M&A investors were seeking high-growth opportunities as the general economy slowed and consequently, the VC industry remained active, also reaching record high levels.
"M&A activity in China will continue to grow in 2016 at a double-digit pace, led by domestic strategic and outbound activity, as well as robust financial-buyer activity," said Qian.
The report predicted continued high levels of activity in the technology and financial service sectors.
It said domestic banks will maintain their expansion to support China's overseas infrastructure and the increasingly global activities of domestic customers.
The report highlighted insurers and financial technology companies, as likely to look to acquire new capabilities and brands. Domestic payment companies are stepping up their international expansion to capture business arising from inbound and outbound cashflows, the report said.
China Daily, January 27, 2016
Mergers and acquisitions hit a record high level in China last year, rising 37 percent year-on-year, a new report has revealed.
Global auditing firm PricewaterhouseCoopers said 9,420 deals were completed during 2015, worth $733.7 billion, which marked an 84 percent increase in value.
George Lu, PwC China's transaction services partner, said the firm also expects M&A activity this year again to be brisk, growing at similar double-digit pace.
The company's latest figures show the number of domestic strategic M&As grew strongly, driven by the ongoing economic transformation, sector consolidation, restructuring and bold inorganic growth strategies.
Technology and financial services were particularly attractive sectors, he said, mainly due to higher growth expectations for the technology sector, as well as some industry consolidation.
The levels of capital being raised, and the significant pace of development by financial services and online payments operations in China also contributed.
Outbound activity also grew 40 percent by volume and 21 percent by value, both new highs.
The private sector led the charge, but financial buyers and private equity investors were also very active, as State-owned enterprises remained largely subdued.
"In 2015 we saw a continuation of the outbound trend, with strategic buyers pursuing inorganic growth strategies and seeking technologies and brands to bring back to the China market, as well as significant participation from PEs and financial buyers acquiring overseas assets with a China angle," said Lu.
"There were 40 percent more outbound deals in 2015, and I believe we will see this kind of rate of growth for the next few years as Chinese-led multinational corporations start to emerge on the global stage."
The report also showed private equity and financial investor deals increasing 79 percent by deal volume and 169 percent by deal value.
Domestic investors were especially active, although the focus on domestic A-Share markets as an exit route made it a tougher environment for foreign PEs.
Leon Qian, PwC' transaction services northern China leader, said M&A investors were seeking high-growth opportunities as the general economy slowed and consequently, the VC industry remained active, also reaching record high levels.
"M&A activity in China will continue to grow in 2016 at a double-digit pace, led by domestic strategic and outbound activity, as well as robust financial-buyer activity," said Qian.
The report predicted continued high levels of activity in the technology and financial service sectors.
It said domestic banks will maintain their expansion to support China's overseas infrastructure and the increasingly global activities of domestic customers.
The report highlighted insurers and financial technology companies, as likely to look to acquire new capabilities and brands. Domestic payment companies are stepping up their international expansion to capture business arising from inbound and outbound cashflows, the report said.
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Haier's GE unit buy highlights growing China M&A maturity
HONG KONG | By Denny Thomas
In the lead up to General Electric Co's (GE.N) appliance unit auction, Haier Group did something Chinese bidders have rarely dared to do in a competitive global M&A deal.
While informal discussions centered around a bid of $4.2 billion, people familiar with the matter told Reuters, Haier submitted a knock-out $5.4 billion binding offer, moving decisively to trump at least six other bidders including South Korea's Samsung Electronics (005930.KS), China's Midea Group (000333.SZ) and Turkey's Arcelik (ARCLK.IS).
Haier's swift, bold move bore all the hallmarks of a seasoned, well-prepared M&A player and underscored how Chinese buyers are becoming increasingly confident about their ability to clinch deals within tight timeframes.
Howard Yu, professor of strategic management and innovation at IMD in Geneva, said after years of domestic consolidation China's state and private companies had joined the "big boys" in global M&A.
"Such trend has been encouraged by central government... but the domestic industry has also been consolidated to a point that foreign players increasingly look like the only plausible targets," Yu said.
For Chinese bidders who had earned a reputation among Western bankers for being hobbled by regulations, politics and fuzzy decision-making, Haier's ability to seal such a deal in a month marked a significant step.
And with slowing economic growth at home and a weakening yuan, the move of Chinese corporations overseas is set to accelerate, according to bankers and experts.
THIRD TIME'S A CHARM
Zhang Ruimin, the 67-year-old founder of Haier, had twice previously failed to clinch transformative U.S. deals, beaten in a 2005 bid for Maytag by U.S. giant Whirlpool Corp (WHR.N) and deciding against a 2008 takeover of the same GE appliances unit.
Advised by Bank of America (BAC.N), Zhang was unwilling to let his long-held dream slip this time. "This was a once in a life opportunity, they couldn't let it go," one person familiar with the deal told Reuters. "Haier was a motivated buyer."
GE was also a motivated seller, seeking a swift resolution after waiting almost two years before U.S. antitrust regulators eventually blocked the original sale of the business to Sweden's Electrolux (ELUXb.ST) for $3.3 billion. GE kick-started a formal auction process after that deal fell through in December. GE's advisor Goldman Sachs (GS.N) reached out to about half a dozen bidders, the sources said, who declined to be identified as the information is not public.
Haier forked out at least $100 million more than the nearest bidder, they added.
A Haier spokesman declined to comment on the specifics of the bidding process, but said GE "felt that Haier's single and one-time submission presented the best offer for the business in terms of sustainably taking the company forward."
GE, Samsung, Midea and Arcelik declined to comment.
CHINA'S OUTBOUND RUSH
Haier said it paid a multiple of 8.2 times for projected 2015 earnings before interest, taxes, depreciation, and amortization (EBITDA) net of certain tax benefits, while GE valued the sale at 10 times EBITDA. In comparison, Whirlpool trades at 7.7 times.
Chinese buyers have often frustrated the vendors by moving slowly through deal negotiations and have at times abandoned their efforts mid-way, as in Geely's 2010 purchase of Ford Motor Co's (F.N) Volvo unit.
Cross-cultural acquisitions are also risky, as Zhang himself highlighted in 2009, telling Financial Times "we still lack the ability to integrate the two different cultures".
But things have been moving more swiftly recently.
Last year, Chinese companies launched a record $116 billion worth of deals, according to Thomson Reuters data. China outbound M&A had its best ever start to a year in 2016, helped by the Haier deal. In January, a consortium-led by Chemicals Corp of China agreed to buy machinery maker KraussMaffei Group for about $1 billion, in another example of deal that was done at lightening pace.
For Haier, the confidence to move quickly also comes from previous acquisition success. Over the past four years, Haier has bought New Zealand's Fisher & Paykel Appliances and Japan's Sanyo Electronics and successfully managed those businesses. "This trend is definitely going to pick up pace," one person who worked on the GE-Haier deal said. "We are going to see Chinese buyers being more aggressive in deal making."
(Additional reporting by Matthew Miller in BEIJING, Vincent Lee in SEOUL and Ceyda Caglayan in ISTANBUL, DONNY KWOK in HONG KONG; Editing by Lincoln Feast)
Haier's GE unit buy highlights growing China M&A maturity | Reuters
HONG KONG | By Denny Thomas
In the lead up to General Electric Co's (GE.N) appliance unit auction, Haier Group did something Chinese bidders have rarely dared to do in a competitive global M&A deal.
While informal discussions centered around a bid of $4.2 billion, people familiar with the matter told Reuters, Haier submitted a knock-out $5.4 billion binding offer, moving decisively to trump at least six other bidders including South Korea's Samsung Electronics (005930.KS), China's Midea Group (000333.SZ) and Turkey's Arcelik (ARCLK.IS).
Haier's swift, bold move bore all the hallmarks of a seasoned, well-prepared M&A player and underscored how Chinese buyers are becoming increasingly confident about their ability to clinch deals within tight timeframes.
Howard Yu, professor of strategic management and innovation at IMD in Geneva, said after years of domestic consolidation China's state and private companies had joined the "big boys" in global M&A.
"Such trend has been encouraged by central government... but the domestic industry has also been consolidated to a point that foreign players increasingly look like the only plausible targets," Yu said.
For Chinese bidders who had earned a reputation among Western bankers for being hobbled by regulations, politics and fuzzy decision-making, Haier's ability to seal such a deal in a month marked a significant step.
And with slowing economic growth at home and a weakening yuan, the move of Chinese corporations overseas is set to accelerate, according to bankers and experts.
THIRD TIME'S A CHARM
Zhang Ruimin, the 67-year-old founder of Haier, had twice previously failed to clinch transformative U.S. deals, beaten in a 2005 bid for Maytag by U.S. giant Whirlpool Corp (WHR.N) and deciding against a 2008 takeover of the same GE appliances unit.
Advised by Bank of America (BAC.N), Zhang was unwilling to let his long-held dream slip this time. "This was a once in a life opportunity, they couldn't let it go," one person familiar with the deal told Reuters. "Haier was a motivated buyer."
GE was also a motivated seller, seeking a swift resolution after waiting almost two years before U.S. antitrust regulators eventually blocked the original sale of the business to Sweden's Electrolux (ELUXb.ST) for $3.3 billion. GE kick-started a formal auction process after that deal fell through in December. GE's advisor Goldman Sachs (GS.N) reached out to about half a dozen bidders, the sources said, who declined to be identified as the information is not public.
Haier forked out at least $100 million more than the nearest bidder, they added.
A Haier spokesman declined to comment on the specifics of the bidding process, but said GE "felt that Haier's single and one-time submission presented the best offer for the business in terms of sustainably taking the company forward."
GE, Samsung, Midea and Arcelik declined to comment.
CHINA'S OUTBOUND RUSH
Haier said it paid a multiple of 8.2 times for projected 2015 earnings before interest, taxes, depreciation, and amortization (EBITDA) net of certain tax benefits, while GE valued the sale at 10 times EBITDA. In comparison, Whirlpool trades at 7.7 times.
Chinese buyers have often frustrated the vendors by moving slowly through deal negotiations and have at times abandoned their efforts mid-way, as in Geely's 2010 purchase of Ford Motor Co's (F.N) Volvo unit.
Cross-cultural acquisitions are also risky, as Zhang himself highlighted in 2009, telling Financial Times "we still lack the ability to integrate the two different cultures".
But things have been moving more swiftly recently.
Last year, Chinese companies launched a record $116 billion worth of deals, according to Thomson Reuters data. China outbound M&A had its best ever start to a year in 2016, helped by the Haier deal. In January, a consortium-led by Chemicals Corp of China agreed to buy machinery maker KraussMaffei Group for about $1 billion, in another example of deal that was done at lightening pace.
For Haier, the confidence to move quickly also comes from previous acquisition success. Over the past four years, Haier has bought New Zealand's Fisher & Paykel Appliances and Japan's Sanyo Electronics and successfully managed those businesses. "This trend is definitely going to pick up pace," one person who worked on the GE-Haier deal said. "We are going to see Chinese buyers being more aggressive in deal making."
(Additional reporting by Matthew Miller in BEIJING, Vincent Lee in SEOUL and Ceyda Caglayan in ISTANBUL, DONNY KWOK in HONG KONG; Editing by Lincoln Feast)
Haier's GE unit buy highlights growing China M&A maturity | Reuters
TaiShang
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Buy buy and buy when prices of valuable foreign assets are at multiple-year lows。
This also opens up the space for the companies who struggle now saturated/consolidated domestic market. I am glad to see acquisitions of critical technological assets such as semiconductors, machineries, heavy industries as well as high-end apparel/textile. I would like to see more deals in auto industry now. Maybe BYD can do such deals.
At the same time, Chinese companies must strengthen their domestic position in order not to let foreign domination on any sector.
TaiShang
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Jack Ma eyes acquisitions to weave his magic again
Updated: 2016-02-06 15:56
There are lots of success stories in China and one of them is Jack Ma, founder of e-commerce giant Alibaba.
The 51-year-old former English lecturer rose to be China's richest man in only a decade.
And although he was relegated to second behind property magnate Wang Jianlin, president of Dalian Wanda Group, on the Forbes 2015 rich list published in October, his personal wealth still amounted to a hefty $21.4 billion (19.7 billion euros).
Virtually everyone in China at some time has used the company's Taobao retail platform - China's equivalent of eBay and described by The Economist magazine as "the world's greatest bazaar".
While its fourth quarter financial results announced on Jan 28 revealed that the value of products sold on its platform had risen a respectful 23 percent year-on-year to 964 billion yuan ($147 billion; 135 billion euros), they were also down on the 28 percent rise in the previous quarter. This led to the company's shares dropping 3.7 percent as the New York market opened.
Maggie Wu, chief financial officer of Alibaba group, remained bullish, however, saying the company's performance remained "excellent".
"We achieved impressive revenue growth as we are increasingly monetizing the user activity on our marketplaces, particularly on mobile devices," she said.
Ma, who remains an iconic figure in the world's second-largest economy and a role model for many would-be entrepreneurs, has embarked on a courageous diversification strategy to offset slowing sales growth.
Since its IPO, it has been on something of a spending spree. It has acquired many businesses away from its Internet core, moving into finance, entertainment, big data, logistics and healthcare.
It even bought a 50 percent stake in the Chinese football club Guangzhou Evergrande in 2014.
The latest move to grab the headlines was in December when it bought the South China Morning Post, the Hong Kong newspaper, for $266 million.
The move echoed Amazon founder Jeff Bezos' 2012 acquisition of the Washington Post, although he made the investment privately and not through his company.
Many media commentators certainly have also highlighted the fact that the company's shares, after hitting a high of $120 shortly after the float, are now trading just below the IPO initial price of $68.
What has been concerning some investors is whether its diversification strategy is logical.
Some argue the group would be better served paying more attention to and investing in its flagship retail platforms.
Comparisons are made between Alibaba and its great Chinese Internet rival Tencent - founded by Ma Huateng and Zhang Zhiding in 1998.
It has consistently focused on its core activities and, in particular, WeChat, which was launched in 2011 as China's answer to WhatsApp and now has 650 million active users.
Baidu has also hired Andrew Ng, who was once head of Google Brain, as its chief scientist to lead its research and development operations into the development of artificial intelligence in Beijing and San Francisco.
"I just don't think it is a great option for Alibaba. If you look at its Taobao core business, it is not growing as fast as before. How much can Alibaba gain from innovation? It is best going into other areas from which it can generate faster returns," says Lin Chen, assistant professor of marketing at China Europe Business School, or CEIBS, in Shanghai.
"Baidu is really investing a lot of time in artificial intelligence which is great. It is what US companies are doing right now but it is not a mature technology and, as such, it cannot be monetized right now."
Alibaba is unlikely to let up on its diversification strategy. According to analysts BNP Paribas, the company could even step on the accelerator.
It predicts the company has a potential war chest for acquisitions of some $38 billion in 2016, two-a-half times the $15 billion it spent in 2015.
Towson, also co-author of the best-selling The One Hour China Book, says Alibaba's love of dealmaking is partly driven by a need to gain greater scale.
"If your competitor becomes twice your size, you are likely at risk and just growing organically will not be enough. So Alibaba's activity is driven by a race to achieve size. This can often lead to competitive panic."
Qiu Lingyun, associate professor of management information systems at Guanghua School of Management, believes many misunderstand the logic of Alibaba's recent strategy.
"By these acquisitions they are actually investing in their core business. Their core competency is actually running a huge platform, which has now accumulated a huge amount of consumer data," he says.
"They need to find all kinds of ways to monetize this consumer intelligence. Many of its acquisitions are consumer orientated like online video, online gaming or what have you. So long as they are doing this, you can still say they are investing in their core business."
Wang Qing, professor of marketing and innovation at Warwick Business School in the UK, insists Alibaba is just taking advantage derived from freer regulation in China than in the US and Europe.
"They see what Alibaba is doing as risk and not an opportunity. What they often fail to appreciate is that antitrust regulation is not as well established in China as it is in the United States and Europe," she says.
Updated: 2016-02-06 15:56
There are lots of success stories in China and one of them is Jack Ma, founder of e-commerce giant Alibaba.
The 51-year-old former English lecturer rose to be China's richest man in only a decade.
And although he was relegated to second behind property magnate Wang Jianlin, president of Dalian Wanda Group, on the Forbes 2015 rich list published in October, his personal wealth still amounted to a hefty $21.4 billion (19.7 billion euros).
Virtually everyone in China at some time has used the company's Taobao retail platform - China's equivalent of eBay and described by The Economist magazine as "the world's greatest bazaar".
While its fourth quarter financial results announced on Jan 28 revealed that the value of products sold on its platform had risen a respectful 23 percent year-on-year to 964 billion yuan ($147 billion; 135 billion euros), they were also down on the 28 percent rise in the previous quarter. This led to the company's shares dropping 3.7 percent as the New York market opened.
Maggie Wu, chief financial officer of Alibaba group, remained bullish, however, saying the company's performance remained "excellent".
"We achieved impressive revenue growth as we are increasingly monetizing the user activity on our marketplaces, particularly on mobile devices," she said.
Ma, who remains an iconic figure in the world's second-largest economy and a role model for many would-be entrepreneurs, has embarked on a courageous diversification strategy to offset slowing sales growth.
Since its IPO, it has been on something of a spending spree. It has acquired many businesses away from its Internet core, moving into finance, entertainment, big data, logistics and healthcare.
It even bought a 50 percent stake in the Chinese football club Guangzhou Evergrande in 2014.
The latest move to grab the headlines was in December when it bought the South China Morning Post, the Hong Kong newspaper, for $266 million.
The move echoed Amazon founder Jeff Bezos' 2012 acquisition of the Washington Post, although he made the investment privately and not through his company.
Many media commentators certainly have also highlighted the fact that the company's shares, after hitting a high of $120 shortly after the float, are now trading just below the IPO initial price of $68.
What has been concerning some investors is whether its diversification strategy is logical.
Some argue the group would be better served paying more attention to and investing in its flagship retail platforms.
Comparisons are made between Alibaba and its great Chinese Internet rival Tencent - founded by Ma Huateng and Zhang Zhiding in 1998.
It has consistently focused on its core activities and, in particular, WeChat, which was launched in 2011 as China's answer to WhatsApp and now has 650 million active users.
Baidu has also hired Andrew Ng, who was once head of Google Brain, as its chief scientist to lead its research and development operations into the development of artificial intelligence in Beijing and San Francisco.
"I just don't think it is a great option for Alibaba. If you look at its Taobao core business, it is not growing as fast as before. How much can Alibaba gain from innovation? It is best going into other areas from which it can generate faster returns," says Lin Chen, assistant professor of marketing at China Europe Business School, or CEIBS, in Shanghai.
"Baidu is really investing a lot of time in artificial intelligence which is great. It is what US companies are doing right now but it is not a mature technology and, as such, it cannot be monetized right now."
Alibaba is unlikely to let up on its diversification strategy. According to analysts BNP Paribas, the company could even step on the accelerator.
It predicts the company has a potential war chest for acquisitions of some $38 billion in 2016, two-a-half times the $15 billion it spent in 2015.
Towson, also co-author of the best-selling The One Hour China Book, says Alibaba's love of dealmaking is partly driven by a need to gain greater scale.
"If your competitor becomes twice your size, you are likely at risk and just growing organically will not be enough. So Alibaba's activity is driven by a race to achieve size. This can often lead to competitive panic."
Qiu Lingyun, associate professor of management information systems at Guanghua School of Management, believes many misunderstand the logic of Alibaba's recent strategy.
"By these acquisitions they are actually investing in their core business. Their core competency is actually running a huge platform, which has now accumulated a huge amount of consumer data," he says.
"They need to find all kinds of ways to monetize this consumer intelligence. Many of its acquisitions are consumer orientated like online video, online gaming or what have you. So long as they are doing this, you can still say they are investing in their core business."
Wang Qing, professor of marketing and innovation at Warwick Business School in the UK, insists Alibaba is just taking advantage derived from freer regulation in China than in the US and Europe.
"They see what Alibaba is doing as risk and not an opportunity. What they often fail to appreciate is that antitrust regulation is not as well established in China as it is in the United States and Europe," she says.
