China Global M&A Push, 2005 ~ Nowadays

[TaiShang]

Australia OKs sale of dairy farm to China's billionaire
Xinhua, February 24, 2016


The Australian government has approved the sale of the nation's biggest dairy farming company to Chinese billionaire Lu Xianfeng.

Van Diemen's Land (VDL) - which boasts several dairy farms in Tasmania's north, known for having the world's cleanest air and water - officially changed hands late Tuesday, with the deal getting the all clear from the Australia's Treasurer Scott Morrison.

In line with all foreign asset sales, the $200 million deal has been subjected to a review by Australia's Foreign Investment Review Board, which found agreement met its "national interest" criteria.

Following the announcement, Senator Eric Abetz said the decision showed Tasmania was "open for business" and the conditions imposed by Treasurer Morrison would safeguard the industry for years to come.

"This approval will see an additional 95 jobs in Tasmania as well as a significant investment in VDL of more than ($72 million)," Senator Abetz said in a statement on Wednesday.

"With Free Trade Agreements with Japan, (South) Korea and China, combined with the government's shipping reform package, Tasmania has the potential to be opened up to new world markets which could dramatically grow the number of jobs in Tasmania."

Originally, VDL had agreed to sell its 13 farms - with a combined area of 19,000-hectares and 18,000 milking cows - to Australian company, Tasfoods, for $180 million. But the New Plymouth District Council, the group's New Zealand-based owner, went back on the deal after receiving a better offer from Lu's Chinese company, Moon Lake Investments.

Given VDL has never been Australian owned despite operating out of Tasmania since 1825, many politicians have been lobbying to have the asset acquired by a local company.

However, Abetz has labeled some of reasons against the deal as "bizarre" and bordering on "xenophobic".

The finalization of the sale has also been praised by the Tasmanian Farmers and Grazers Association (TFGA).

"Moon Lake Investments' continued investment in the sector will further reinforce the importance of the dairy industry, and agribusiness in general, to the Tasmanian economy," TFGA chief executive Skillern said on Tuesday.

As part of the deal, Moon Lake Investments must comply with Australian taxation law, including disclosing any transactions with non-Australian residents, or face the prospect of hefty fines and potentially divestment of the asset.

 

[TaiShang]

Given VDL has never been Australian owned despite operating out of Tasmania since 1825, many politicians have been lobbying to have the asset acquired by a local company.

LOL


I guess there are valuable assets outside the protectionist US market, too. I read Chinese company pulled its offer to buy Western Digital due to US government intervention.

 

[TaiShang]

http://china.org.cn/business/2016-02/26/content_37877677.htm
China's aviation giant HNA bids for London airport

HNA Group, the Chinese aviation and shipping conglomerate, and a consortium led by Ontario Teachers' Pension Plan Board and Borealis Infrastructure, are in the lead to buy London City Airport from its United States owners, according to sources close to the potential deal.

The central London airport, owned by Global Infrastructure Partners, could fetch more than 2 billion pounds ($2.8 billion).

The companies have been asked to submit another round of bids on Wednesday, and GIP has not chosen a winner, two of the sources said, adding Cheung Kong Infrastructure Holdings Ltd is also still interested in bidding.

The airport, located about 10 kilometers from London's financial district and opened in 1987, was bought by American International Group Inc and GIP in 2006.

At the time, reports said the companies agreed to pay 750 million pounds, though terms were not disclosed. Two years later, American International sold its stake to GIP and Highstar Capital, which now owns 25 percent.

Any deal would add to the $22.7 billion of airport-related acquisitions already completed over the past 12 months, according to data compiled by Bloomberg.

Spokesmen for GIP, PSP and Borealis declined to comment. Representatives for Ontario Teachers' Pension and CKI did not immediately respond to requests for comment, while a media representative for HNA said she could not immediately comment.

The winning bidder will have to come to terms with ongoing political wranglings that stand in the way of a planned expansion that would help City Airport serve 6.5 million passengers a year by 2023. London Mayor Boris Johnson vetoed the 250-million-pound plan to add aircraft stands, an arrivals terminal and taxiway last year.

Flights from City Airport carried 3.6 million passengers in 2014, according to the operation's annual report, a 7.9 percent increase from the year before.

HNA, which controls China's fourth-largest carrier, Hainan Airlines Co Ltd, last month bought a stake in Uber China Ltd and completed its acquisition of aircraft lessor Avolon Holdings Ltd for $7.6 billion including debt.

Last week, its shipping affiliate announced a $6.1 billion takeover offer for California-based software distributor Ingram Micro Inc.

 

[Jlaw]

http://china.org.cn/business/2016-02/26/content_37877677.htm

HNA Group, the Chinese aviation and shipping conglomerate, and a consortium led by Ontario Teachers' Pension Plan Board and Borealis Infrastructure, are in the lead to buy London City Airport from its United States owners, according to sources close to the potential deal.

The central London airport, owned by Global Infrastructure Partners, could fetch more than 2 billion pounds ($2.8 billion).

The companies have been asked to submit another round of bids on Wednesday, and GIP has not chosen a winner, two of the sources said, adding Cheung Kong Infrastructure Holdings Ltd is also still interested in bidding.

The airport, located about 10 kilometers from London's financial district and opened in 1987, was bought by American International Group Inc and GIP in 2006.

At the time, reports said the companies agreed to pay 750 million pounds, though terms were not disclosed. Two years later, American International sold its stake to GIP and Highstar Capital, which now owns 25 percent.

Any deal would add to the $22.7 billion of airport-related acquisitions already completed over the past 12 months, according to data compiled by Bloomberg.

Spokesmen for GIP, PSP and Borealis declined to comment. Representatives for Ontario Teachers' Pension and CKI did not immediately respond to requests for comment, while a media representative for HNA said she could not immediately comment.

The winning bidder will have to come to terms with ongoing political wranglings that stand in the way of a planned expansion that would help City Airport serve 6.5 million passengers a year by 2023. London Mayor Boris Johnson vetoed the 250-million-pound plan to add aircraft stands, an arrivals terminal and taxiway last year.

Flights from City Airport carried 3.6 million passengers in 2014, according to the operation's annual report, a 7.9 percent increase from the year before.

HNA, which controls China's fourth-largest carrier, Hainan Airlines Co Ltd, last month bought a stake in Uber China Ltd and completed its acquisition of aircraft lessor Avolon Holdings Ltd for $7.6 billion including debt.

Last week, its shipping affiliate announced a $6.1 billion takeover offer for California-based software distributor Ingram Micro Inc.

That is good news. For the record, the Ontario Pension Plan are run by very knowledgeable and experienced people. They are one of the quasi-government board that are very competent. In fact, teachers pension in Ontario is one of the best if not the best in all of Canada.

Anything these guys are involved it tend to turn into gold.

 

[TaiShang]

That is good news. For the record, the Ontario Pension Plan are run by very knowledgeable and experienced people. They are one of the quasi-government board that are very competent. In fact, teachers pension in Ontario is one of the best if not the best in all of Canada.

Anything these guys are involved it tend to turn into gold.

Looks like they are in a shopping spree recently. Gobbling up Western companies.

 

[oprih]

Great news, this is a good investment for the Chinese company.

 

[TaiShang]

Chinese Firm Buys German Waste Management Company EEW
2016-03-03

A factory of Germany's largest waste management company EEW. [Photo: qianlong.com]

State-controlled Beijing Enterprises Holdings has bought Germany's largest waste management company, EEW, for 1.5 billion U.S. dollars.

This is the largest ever Chinese acquisition of a German company.

The Vice Chairman of Beijing Enterprises says the deal can help China to develop waste-to-energy technology.

EEW is Germany's leading waste-to-energy firm.

It operates 18 garbage incinerators in Germany and neighboring countries.

The company turned more than 4 million tons of waste into energy last year.

 

[TaiShang]

http://china.org.cn/business/2016-03/05/content_37946133_4.htm

Record year in sight for overseas mergers and acquisitions
China Daily, March 5, 2016

Chinese companies large and small, private and State-owned, are embarking on a spree of overseas mergers and acquisitions, spurred by government policies that encourage overseas expansion.

All the signs are that M&A activity will break all records this year, even at a time of economic slowdown.

But what are the targets? Where are they? And, more importantly, how will Chinese companies overcome the inevitable challenges?

Ministry of Commerce data suggest smaller enterprises rather than larger, State-owned and private entities are behind the latest surge. In January, China's non-financial outbound investment rose to 78.7 billion yuan ($12 billion) almost three times the rate in December and a rise of 18.2 percent from a year earlier. Of the country's total overseas direct investment in January, 92.5 percent came from smaller enterprises, up 175 percent from the same period last year.

Figures from information provider Morning Whistle Group show that private companies completed 76.78 percent of the M&A deals last year, while State-owned enterprises accounted for 20.29 percent. The target areas were technology, media and telecommunications, agriculture and food, and energy and mineral resources. That is likely to remain the same this year, according to analysts.

Commerce Ministry spokesman Shen Danyang attributed the trend to government policies aimed at promoting collaboration between Chinese entities and international companies. Chinese investment in foreign manufacturing rose 87.8 percent year-on-year to 10.6 billion yuan in January, with much of the money flowing into the telecommunications, electronics, pharmaceuticals and motor vehicle sectors, Shen said.

And the data supporting the boom keep coming. Chinese investment in the United States rose to more than 10 billion yuan in January, nearly four times the amount in the same month last year, according to ministry data.

Growth factors So what is driving this growth?

Diving commodity prices are making some foreign companies a cheap buy. In addition, many SOEs have the means to buy, and for private companies, big or small, historically low interest rates mean it has become easier to borrow funds.

The Belt and Road Initiative, seen by many as a key pillar of China's foreign trade drive, means government cash may well be available to SOEs to help fund acquisitions and make investments.

The Silk Road Fund, a government-owned investment vehicle, was launched at the end of 2014 with an injection of $40 billion. It aims to support infrastructure projects, mainly in Eurasian countries that lie along the proposed Silk Road Economic Belt and 21st Century Maritime Silk Road routes between China and Europe.

More to the point, Chinese State and private companies see the Belt and Road Initiative as a clear sign that the government wants them to look overseas.

"A lot of SOEs are fairly cash rich," Ben Cavender of China Market Research Group told nasdaq.com recently. "One of the issues they are running into is they're out of room to grow in their home market." Probably the most eye-catching recent deal came in February, when China National Chemical Corp, commonly known as ChemChina, agreed to pay $43 billion for Swiss pesticide maker Syngenta. If regulators and the Swiss company's shareholders approve the deal, it will be the largest-ever Chinese takeover of a foreign company.

The chemical company also grabbed headlines by buying Italy's premium tire maker Pirelli for $7.7 billion. The deal was funded in part by the Silk Road Fund, which took a 25 percent stake in the ChemChina unit set up to buy Pirelli's shares.

Wang Jianlin, chairman of Dalian Wanda Group, has forthright views on foreign acquisitions. "Any time is good for an M&A," he told business students at Oxford University recently. "It's hard to determine when it's inexpensive and when it's expensive. It may be the case if you look at your investment on a two- to three-year time span, but if you take a long-term view, say 10 years, then it really doesn't matter." However, merger activity can have its challenges. Most analysts accept that the US, although a huge market, operates a series of regulatory hurdles, as well as a Congress that at times seems highly protectionist.

For example, a move by Chinese investors led by GSP Ventures to acquire an 80 percent stake in the lighting and auto unit of the Dutch company Philips fell through after the US Committee for Foreign Investment blocked the move on security grounds. Philips has several US government contracts.

"The United Kingdom and the US are equally important countries," Wang said. "I've invested $10 billion in the US because it is a big market, but the UK is the freest market in the world. The US claims to be a free country, but for investing, there are many complicated approval processes."

Still, the foreign merger route for Chinese companies continues unabated. Chinese companies look at mergers as a way of acquiring know-how to help the country in its transition from a focus on "made in China" to "designed in China".

"M&A deals are an important ingredient of China's State-driven transition and development strategy," said Danae Kyriakopoulou, senior economist at the Centre for Economics and Business Research in London.

"This is because Chinese companies need to acquire the know-how of the new growth sectors to support the economy's rebalancing away from being the world's hub for basic manufacturing and heavy industry and towards high-end economic activities, and M&A with companies of those more-developed economies in those sectors is a way to do that."

Wang Jianlin (right), chairman of Dalian Wanda Group Co, attends a ceremony to introduce the English version of his book－The Wanda Way－at the British Museum in London. The book has been well-received in China and has been reprinted 15 times. [Photo/China Daily]

According to Duncan Innes-Kerr, regional director for Asia at the Economist Intelligence Unit, Chinese companies are being encouraged to seek merger targets abroad, buoyed by government policies that have reduced paperwork and eased restrictions on foreign investments: "The slowdown in China's economic growth has added momentum to the trend." Professor Alan Barrell of the Judge Business School, University of Cambridge, said: "It makes enormous sense for a cash-rich economy such as China to spread its wings and grow internationally by acquisition, and to explore sectors as yet unexploited overall by M&A involving overseas companies and assets, notably technology, and not just real estate."

However, there are pitfalls. Kyriakopoulou said the main challenges facing Chinese enterprises arise after deals have been struck: "These are chiefly to do with the understanding of different regulatory systems and the clash of corporate cultures."

When he addressed the students in Oxford, Wanda chairman Wang spoke about how the language barrier can affect M&A. "English is our greatest challenge. We have a lot of senior employees in Wanda. However, when going global in tourism, sports and entertainment, inadequacy in English is a huge challenge," he said.

 

[TaiShang]

Chinese firms set for record M&A
Shanghai Daily, April 26, 2016

China is expected to see record outbound mergers and acquisitions this year as the government encourages overseas expansion by companies which also need to bolster their competitiveness, PricewaterhouseCoopers said on Monday.

In the first quarter of the year, 115 outbound M&A deals were announced, up 51 percent from the same period of last year, PwC said in a report. Boosted by several high-profile deals, the total value hit US$82.6 billion in the first quarter, beating all previous annual figures.

China outbound M&As will continue to set historical highs in 2016, PwC said.

"Chinese mainland enterprises continued to actively engage in outbound M&A deals, spurred by their inherent need to step up transformation, bolster competitiveness and diversify overseas asset allocation," said Andrew Li, leader of PwC China advisory services in China.

"Outbound M&As have become part of the long-term strategy for many Chinese companies, and is less likely to be affected by temporary fluctuations in the Chinese economy or yuan depreciation."

The momentum will be buoyed by China’s Belt and Road initiative to boost Chinese investment in central and eastern Europe, as well as government efforts to streamline approval process for outbound investment by Chinese companies, PwC said.

Private companies were the drivers with 67 deals in the first quarter, against 27 deals by state-owned enterprises and 21 for financial buyers.

SOEs topped with outbound deal value of US$56.4 billion, or 68 percent of the total, outpacing US$15.1 billion by private firms and US$11.1 billion by financial buyers, data showed.

 

[TaiShang]

PwC: Hospitals are becoming new focus of M&As
Last Updated: 2016-05-06 07:56 | China Daily

Mergers and acquisitions in China's hospital sector became a new focus in 2015, and large-scale deals and more cross-border transactions will likely be made in the near future, said a report by global auditing firm PricewaterhouseCoopers on Thursday.

There were 48 mergers and acquisitions of Chinese hospitals last year, of which 27 were general hospitals and their disclosed investment amount totaled 3.98 billion yuan ($612.1 million). In contrast, the disclosed value for specialized hospitals fell sharply in 2015 compared to 2014.

Leon Qian, PwC northern China transaction services & healthcare industry leader, said investors were previously attracted to specialized hospitals, especially dental, obstetric and paediatric hospitals, as they had low risk and could be easily replicated and enlarged to generate profits.

"However, with more capital flowing in, such targets (specialized hospitals) had become scarce, which led to a dramatic drop in investment in 2015. Also in 2015, general hospitals became the main focus of investment as they yielded stable cash flows and tended to offer the most benefit for new funding," said Qian.

The report also showed that there has been a rise in investment activity in public hospitals, with their total disclosed deal value reaching 844 million yuan in 2015.

Investment in private hospitals reached a record high in 2014 in both the volume and value. However, in 2015, the deal value plunged to 3.94 billion yuan, largely because of fewer deals associated with specialized hospitals.

Notably, the rising role of strategic investors, in particular A-share listed companies, in hospitals has elicited exponential growth in deal value since 2014. The disclosed investment amount totaled 3.8 billion yuan in 2015.

"Strategic investors are looking to explore horizontal integration with A-share listed healthcare companies, including pharmaceutical, medical equipment and healthcare management enterprises," said Jin Jun, PwC China strategy consulting partner.

Despite the strong interest of financial investors such as private equity funds in healthcare, the disclosed deal value dropped to 985 million yuan in 2015, decreasing by approximately 65 percent compared with 2014.

"With strategic investors continuing to have a strong interest in the healthcare market and financial investors willing to pour more money into the industry, large-scale deals will likely be made in the near future, including hospital group or standalone hospital acquisitions," said Jin.

Jin added that more cross-border transactions are expected to be conducted in various ways, such as consolidation and joint ventures, and healthcare company IPOs will be more popular in capital market.

The report also said China's investment trends in healthcare saw a shift from traditional targets, such as medical examination centers and dental clinics, to core business areas including hospitals, rehabilitation centers and clinics in the past four years.

 

[TaiShang]

China's Midea Offers to Buy German's Robot Maker Kuka AG
2016-05-18 17:39:58 CRIENGLISH.com Web Editor: Li Chenxi

File photo of an exhibition booth of Midea Group [Photo: sohu.com]

Chinese home appliances maker Midea Group has announced its intention to make an acquisition offer to the German industrial robot supplier Kuka AG.

Kuka has been valued by Midea at around 4.4 billion euros, or about 5 billion US dollars.

Midea just raised its stake in Kuka to 10.2 percent in February.

Now it is seeking to increase its stake to at least 30 per cent, making Midea the biggest shareholder of Kuka.

Established in 1898 in southern Germany, Kuka has yearly revenue of 3 billion euro, in which half of its profits comes from China and the United States.

The cooperation of the two companies is expected to boost Kuka's market presence in China.

 

[GS Zhou]

That's really an astonishing news! Kuka is almost like the god of the robotics industry!

I'll buy some new Midea ACs to supports its acquisition!

 

[cirr]

Go Midea！

If you are successful in making an offer for Kuka，I will buy your air-conditioners when the old ones are coming up for replacement this summer。

 

[scherz]

They would profit from each other. Maybe i can take my chance to join the concern as i am chinese xD.

 

[TaiShang]

That's really an astonishing news! Kuka is almost like the god of the robotics industry!

I'll buy some new Midea ACs to supports its acquisition!

Definitely. Kuka is everywhere and able to set industry standards.