(Yicai Global) Aug. 16 -- Chinese regulators have vigorously encouraged mergers, acquisition and restructuring over recent years as the country undergoes an economic transformation and upgrade, data from the China Securities Regulatory Commission shows.
Some CNY2 trillion (USD300 billion) was put into such deals last year, up an average of 41.1 percent from 2013. The regulator mainly backed five key areas: supply-side reforms, technology upgrades, state-owned enterprise reforms, poverty alleviation and Belt and Road construction.
The commission pushed capacity elimination in supply-side reforms, cut inventories and promoted industrial restructuring. Some 118 companies across eight industries with excess capacity spent CNY234 billion on mergers, acquisitions and restructuring. Those industries were steel, cement, shipbuilding, electrolytic aluminum, coal chemicals, automotive, textiles and electricity.
Corporate restructuring and mergers and acquisitions can help cut vicious competition, improve industry focus and slash excess capacity, the CSRC said. Some companies may swap their excess capacity for quality assets to revitalize growth.
In terms of promoting technology advancements, the commission is concerned about how mergers and acquisitions can help push the development of strategic emerging industries. Listed companies in these sectors made 270 deals worth CNY325 billion last year, CSRC data shows. These emerging industries include information technology, high-end equipment manufacturing, energy conservation, environmental protection, new energy, new materials and new services.
The regulator encouraged state-owned enterprises to restructure last year to improve performance. State-controlled listed firms made 678 moves worth CNY1 trillion in 2016, making up 43 percent of the total value of mergers, acquisitions and restructuring.
Mergers and acquisitions that help alleviate poverty and can help listed companies boost global competitiveness were also encouraged by the CSRC. Listed companies in 12 of China's poorer regions made 351 deals worth CNY314 billion last year, or 13 percent of the total.
Some 103 cross-border deals were made to combine for a value of CNY112 billion.