Measured by value, the energy and mining industries led the way. Chinese companies completed $19.4 billion worth of M&A deals in those industries during the first 11 months, constituting 44.4 percent of the total.
"China has a huge demand for energy and is going abroad in search of opportunities," said Zhu Yijie, an analyst at Zero2IPO Research Center. "Usually, Chinese buyers are State-owned enterprises that have sufficient supplies of money. So the value of these deals is usually considerable."
Zhu said M&A deals in the energy and mining industries will continue to be the most valuable in the short term. Deals related to branding, core technology and distribution networks will meanwhile become more popular.
Venture capital and private-equity firms are playing an important role in M&A deals conducted by Chinese companies. Those types of firms completed 177 of the deals, totaling $3.7 billion, in the first 11 months.
"There are 808 companies waiting to go public in China," said Liu Zhou, managing director of Fortune Capital, a leading Chinese equity investment company.
"With the way things usually go, it will take two to three years for all of them to be listed. So we should be diversifying our exit channels, and M&A is a good way to do that."
Liu said venture capital and private-equity firms used IPOs to exit from 70 percent of the investments they stepped out of in the first 11 months of the year. That's down from 90 percent last year but is still a much higher proportion than is common among investment exits in the United States.
"Amid this round of economic transformation, many opportunities are emerging in manufacturing," said Deng Feng, founding managing director of the China-based Northern Light Venture Capital.
Solar yacht put into use in SE China
Feedback
RSS
