Chinese mergers and acquisitions market to be more active in the second half

This reporter Tan Yu beautiful after 2008 years of financial crisis, the global mergers and acquisitions market in the first half of this year signs of recovery, especially the Chinese mergers and acquisitions market "dark" in the growth is more surprising. Late last week, Guohong, head of mergers and acquisitions at JPMorgan's Greater China region, told more than 10 media interviews with the China Economic times that mergers and acquisitions in the Asia-Pacific region, especially in Greater China, will be more active in the second half of 2009.　　He predicts that foreign trade in Asia, especially China, will increase and that the sector will focus on resources, industry and technology.　　Replying to a question from the Chinese Economic Times reporter, Guohong said that judging the future market trend needs to pay close attention to the second quarter of the global economic growth rate and the second half of the development trend, as well as financial market liquidity. Merger and acquisition in Greater China is a reflection of economic and stock market confidence. When the world's major stock indexes peaked in 2007, the volume of mergers and acquisitions reached its all-time peak, at about $459.7 billion trillion. Guohong said the changes in the economy and stock markets were highly correlated with mergers and acquisitions. "If confidence in the economic outlook is strong, companies will go out or do large-scale and strategic deals." If the economy is bad, or if the stock price is weak, the general business decision-makers will sweep the snow in front of each other, rarely do large-scale acquisitions. "In the past two years, the volume of mergers and acquisitions has continued to shrink as the global economy has slipped." Volume fell 30% in 2008, about $321.5 billion trillion.　　In the first half of this year, the growth trend in mergers and acquisitions is likely to continue to fall by 25% to 30%, measured by the announced mergers and acquisitions, which are about $112.5 billion trillion.　　China's mergers and acquisitions reflect the particularity of China's economic independence from the world economy to some extent. According to the statistics of Emna (Static) as at June 30, 2009, the world has announced a total turnover of 459.7 billion U.S. dollars in 2007, the Asia-Pacific region mergers and acquisitions volume of about 87.9 billion U.S. dollars, Greater China region mergers and acquisitions volume of 23.5 billion U.S. dollars, Asia-Pacific share of about 26.7 %。 In 2008 and the first half of 2009, even during the period of global economic instability, China's mergers and acquisitions volume and transaction size accounted for a gradual increase. Greater China's mergers and acquisitions volume accounted for more than 30% of Asia-Pacific market, reaching its all-time high.　　For big deals with more than $500 million trillion and $1 billion trillion in trading, greater China has traded 3.1 billion and 1.7 billion dollars respectively in the first half of 2009, accounting for the Asia-Pacific market in 36.5% and 38.6%. "I remember looking at big mergers and acquisitions five years ago, China may only account for 3%, 4%, 5% of the global market, but it is now 10%," he said. To some extent, the number and size of  mergers and acquisitions in China are rising every year in the global and Asia-Pacific markets.　　"Guohong said.　　The relative dynamism of China's mergers and acquisitions market in the crisis seems to confirm once again the view that China's economy will lead the recovery. Overseas mergers and acquisitions by Chinese companiesMaturing in the past two years, China's participation in cross-border mergers and acquisitions has undergone a fundamental reversal of the trend. Ku Hong Analysis, the new trend of cross-border mergers and acquisitions, from multinational companies to Chinese acquisitions into Chinese companies to buy overseas. "This was staggered two years ago, and China's foreign acquisitions are gradually larger than those of foreign companies or foreign funds coming to China to acquire assets." In the first half of this year, external and internal proportion of the difference is more obvious, foreign trade accounted for more than 80%. Chinese companies are turning from being acquirers into acquirers. According to the statistics from Dealogic Emna, China's "inward" mergers and acquisitions were $2.9 billion trillion in cross-border mergers and acquisitions in 2007, with a "foreign" merger of 3.4 billion US dollars and a 54% per cent "external" transaction. 2008, China "internal" mergers and acquisitions turnover of 3.6 billion U.S. dollars, "foreign" mergers and acquisitions turnover of 4.6 billion U.S. dollars, "foreign" transactions accounted for 57%.　　In the first half of 2009, China's "internal" mergers and acquisitions turnover of 600 million U.S. dollars, "foreign" acquisition turnover of 4.4 billion U.S. dollars, "foreign" transactions accounted for 87%. Guohong that the above figures reflect two points: first, the amount of Chinese companies ' capital and the attitude of Chinese companies to mergers and acquisitions are far greater than the financial strength and inclination of foreign companies to take up mergers and acquisitions in China; second, three or four years ago, multinational companies had enough money and strength to go to China for large-scale acquisitions, because of the impact of the financial crisis　　Multinational companies in the local market after the problem, most of the defensive type of development strategy, in the process of the rise, the proportion of foreign acquisitions in China is much greater than foreign companies to invest in China.　　The financial crisis has sharply reduced corporate mergers and acquisitions, with data from Thomson Reuters showing that global Cross-border mergers and acquisitions have fallen by about 35% per cent year-on-year, compared with a year-on-year increase of more than 40% per cent over the past year, as the financial crisis affected. However, the company cautioned that "many Chinese companies think that with relatively sufficient capital and acquisition targets, they should go to the bottom when overseas asset prices are low, but there is no clear plan for operation and operation." Chinese enterprises ' overseas mergers and acquisitions, the success rate of actual operation completed after the transaction is announced, may be lower than the market average. He said it was a tough process to put the ability, opportunity and market value together in the overseas mergers and acquisitions. At present, the assets involved in the overseas acquisitions of Chinese companies are becoming more and more important to the local economy and stock market, and the difficulty, complexity and uncertainty of the transaction are getting higher. The failure of Rio Tinto's 19.5 billion-dollar injection of Chinalco has reminded Chinese companies to be fully prepared.　　After each failure, Chinese companies will do better next time, which is a process of accumulating experience and maturing gradually. The second half of the mergers and acquisitions market is still optimistic about China's Ping An acquisition deep development, the integration of airlines and Eastern Airlines, Sina acquisition of the media, CIC to the Canadian mining companies, Sinopec acquisition of oil and gas companies ADDAX Petroleum ... On the macroeconomic side is expected to continue to a good lower halfChina's mergers and acquisitions activities will be more active, GU has judged. He predicts that foreign trade in Asia, especially China, will increase. The reason is that investor confidence has increased with cash-rich Chinese companies, they will continue to push for foreign mergers and acquisitions; China's companies are increasingly seeking holding deals, sometimes openly buying Western companies, and some in developed markets are under pressure to reduce their balance sheets, boosting the trend towards minority interests in the region. At the same time, China's domestic integration has become more active.　　Private equity investors in the region are becoming more proactive and flexible. Guohong points out that in the second half of the year, many large-scale foreign takeover deals should be treated with caution. "The certainty of mergers and acquisitions has been reduced by the volatility of stock markets and the fluctuations in commodity prices." In the first half, many deals have encountered difficulties in approving and stock prices, reflecting the uncertainty of the market in the financial crisis. In particular, large-scale external acquisitions, the target company's background is increasingly complex, the successful acquisition of the required comprehensive ability will be stronger. This requires more effort in judgment, analysis and preparation. ”