Listed Chinese Firms Spent USD18 Billion on Overseas M&As Last Year
Zhang Yushuo
DATE:  Jan 13 2020
/ SOURCE:  yicai
Listed Chinese Firms Spent USD18 Billion on Overseas M&As Last Year Listed Chinese Firms Spent USD18 Billion on Overseas M&As Last Year

(Yicai Global) Jan. 13 -- Companies listed on the Chinese mainland conducted CNY124.5 billion (USD18 billion) worth of overseas mergers and acquisitions last year, with an increasing focus on Belt and Road countries.

The firms spent the money in 117 transactions, Yan Qingmin, vice chairman of the China Securities Regulatory Commission, said at the China Capital Market Forum 2020 on Jan. 11. The regulator endorses domestic- and foreign-listed leveraging technology to undertake overseas M&As, he added.

Some of the Chinese firms major acquisitions included the country's second-biggest dairy firm China Mengniu Dairy paying AUD1.5 billion (USD1 billion) for milk powder maker Bellamy's Australia and USD407 million for Lion Dairy; and property giant Evergrande Group's foray into new-energy vehicles. Evergrande acquired Netherlands-based in-wheel motor maker TeT Drive Technology, a majority stake in National Electric Vehicle Sweden, which bought bankrupt carmaker Saab Automobile, and 20 percent of Swedish sports car maker Koenigsegg Automotive.

China's overseas M&As have historically been to acquire upstream raw materials, expand buyers' international market share or to diversify their operations, Securities Daily cited economist Chen Shiyuan as saying. Now, the Belt and Road Initiative is leading to more outbound investment in infrastructure and cross-border capacity cooperation, he added.

The Belt and Road is China's 30- to 40-year grand plan for a multi-continent infrastructure and trade route. President Xi Jinping devised the scheme in 2013.

Expanding overseas via M&As is a fast, safe approach that gives buyers technology, talent and market share, and helps them quickly sell products via local sales networks, the Securities Times cited Wu Yongzu, deputy director of the industrial department at Renmin University of China's Chongyang Institute for Finance Studies, as saying. This can accelerate their learning in the countries' legal, cultural and political environments, he added.

Editor: James Boynton

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Keywords:   Overseas Acquisitions,Listed Firms