Chinese investors take advantage in global mining M&A

08:09, October 29, 2010      

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Access to debt finance, leading technology and lower cost gave Chinese mining and metals investors an advantage in the global mergers and acquisitions (M&A) market, accounting giant Ernst &Young said Thursday.

"Competition for mining and metals assets around the world has steadily increased during 2010, with the sector's total deal value as of Sept. 30 growing 87 percent over the same period last year," said Ernst &Young global mining and metals leader Mike Elliott.

The firm's statistics show the total value of the world's deals in mining and metals for the year to Sept. 30 reached 78.9 billion U.S. dollars, with the number of deals growing 10 percent year-on-year to 827.

For China, the value of mining and metals deals at Sept. 30 has surged 53 percent to 8.9 billion U.S. dollars. Of the 102 transactions, 49 were outbound deals, 40 domestic and 13 inbound.

"China's outbound M&A investment continues to be driven by the country's need to secure reliable sources of raw materials to support its rapid economic growth and urbanization plans," Ernst &Young China mining and metals leader Peter Markey said.

"Debt finance in particular has a strong appeal to vendors, given the lack of bank finance available to miners. Bidders able to provide not just equity but also direct or indirect access to debt are very appealing," he said.

Similarly, bringing innovative Chinese technology to the deal table, together with access to equipment and supplies which lower operating costs, had proved a winning formula for some successful Chinese acquirers this year, Markey said.

Source: Xinhua


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