China Flexes Its M&A Muscles

Julyl 15 - N.Y. Times Blog - The Olympics will give China a chance to celebrate its status as a political and economic heavyweight. The games also come as the Asian nation has been raising its profile in the deal-making business.

While the volume of mergers and acquisitions around the world was down 30 percent in the first half of the year compared with the same time in 2007, transaction volumes were actually up 5 percent in Asia, in large part because of aggressive buying by Chinese companies. Read More.

Private equity Asia – the market today

June 23 - FinanceAsia.com - Asia has been an area of focus for a number of global and local private equity players for many years. The credit crunch has prompted an even larger number of financial sponsors from the US and Europe, and the advisers who look to work with them, to ramp up their Asian presence and make it a key market for their business. Of course, simply increasing presence and capital available in Asia will not be enough for private equity players to succeed in the region.

Asia continues to present some formidable challenges to private equity investment. While these vary from country to country, generally speaking they include a combination of cultural, commercial and regulatory factors that get in the way of successfully investing and successfully exiting in a time honoured fashion. In many markets, and in particular in the two markets which dominate Asian investing - China and India - this means that even the basic LBO deal model that has served private equity so well in the US and Europe often cannot be used. Having said that, certain innovative (and highly structured) solutions have been developed to overcome this issue in India. Read More.

Credit crisis may spark more M&As in China

June 6 - China Daily - The global credit crisis could actually increase the volume of M&A deals in Asia's financial sector and China is likely to be the most active area this year, according to a recent report.

The findings are based on a survey of 281 senior executives working in Asian financial institutions. The Economist Intelligence Unit, on behalf of PricewaterhouseCoopers, conducted the survey in March 2008, marking PwC's third report on financial services M&A.

According to the findings, although the credit crunch has led to market volatility and put a halt on larger financial service deals in the first quarter of 2008 throughout Asia, 44 percent of respondents believed that the credit crisis could actually increase the volume of M&A deals in Asia. Read More.

Carlyle Group's David Rubenstein: 'The Greatest Period for Private Equity Is Probably Ahead of Us'

May 6 - Knowledge@Wharton - David Rubenstein is co-founder and managing director of The Carlyle Group, the Washington, D.C.-based private equity firm with more than $70 billion in assets under management. In March, members of the Wharton Private Equity Club interviewed Rubenstein about the ongoing credit crisis, the industry outlook, the rise of sovereign wealth funds, and why private equity is "one of the greatest exports of the United States." An edited version of the conversation appears below. Read Q&A. (Subscription required)

Focus to shift to raw materials in '08 steel M&A

January 17 - Reuters - Steelmakers could focus their acquisition sights on raw materials in 2008, in a bid to reduce costs which are set to climb on the back of higher iron ore prices, a senior industry expert told Reuters this week.

The steel industry is bracing for a sixth straight year of iron ore price hikes in 2008 as annual contract talks between the mills and top iron ore producers Vale, BHP Billiton and Rio Tinto have begun.

The expectations in the market point to a 30 percent rise in the price of iron ore, a key raw material used to make steel, while industry sources in Australia have said Vale has offered an increase of 70 percent over current term prices. Read More.

Global deals to drive record M&A activity from Asia

December 11 - Reuters - Asian companies and government funds are set to keep up their global buying spree in 2008, powered by a sagging dollar, cheap targets in the financial sector and strong balance sheets.

India and China's hunger for foreign assets and a frenzy of activity in the booming commodities sector triggered record merger and acquisition volumes in Asia outside Japan in 2007, with outbound acquisitions on track to triple last year's total.

That momentum is poised to continue as Asian buyers using swelling foreign exchange reserves look for natural resources, brands, distribution and know-how. Banks and government funds, meanwhile, are stepping in to bail out Western financial institutions reeling from the subprime mortgage crisis. Read More.

Asia's private equity investors opt for China and India: survey

December 10 - M&C.com - Private equity investors in Asia regard China as the market of choice followed by India, a KPMG survey said on Monday.

Sixty-one per cent of the respondents to this year's survey of 119 private equity firms said they have assets in China while 37 per cent have assets in India.

Third were Australia and Singapore, with 29 per cent, Taiwan with 28 per cent and Japan with 21 per cent. Read More.

M&A Outlook 2008: Energy & Healthcare

M&A Outlook 2008: Energy spotlight

Energy has long been one of the largest concerns of the global economy, and with oil prices soaring, unrest in the Middle East and the rise of China, the importance of M&A among energy companies is likely to increase in importance in 2008. Read More.

M&A Outlook 2008: Healthcare spotlight

During the first three quarters of 2007, a total of 722 deals were announced in the healthcare industry worth a combined total of $173 billion, according to investment researcher Irving Levin Associates Inc. The firm notes it now seems unlikely that this year's dollar amount will surpass the record-breaking $267.1 billion reached in 2006. Read More.

$924m private equity funds pour into realty

August 8 - ChinaDaily.com - Singapore-based Ascendas Pte Ltd, Asia's leading business property developer, yesterday launched two China-focused private equity funds totaling $924 million to invest in the country's booming industrial and commercial property market.

The $396 million Ascendas China Industrial & Business Parks Fund will seek to invest in industrial and business park assets in China, while the $528 million Ascendas China Commercial Fund will "target high-quality commercial properties" in the first-tier cities in the country, senior company officials said.

The industrial and business parks fund will mainly invest in light industrial and logistics facilities such as warehouses, distribution centers and suburban business offices, according to Tay Eng Kiat, CEO of Ascendas China. Read More.

China's Private Equity Dynasty?

August 2 - The Motley Fool - According to a recent piece in BusinessWeek, private equity firms spent a total of $737.4 billion in 2006 -- more than the entire GDP of Australia! With buyout firms profiting 20% to 30% per year on average from their lucrative deals, rapid growth in the private equity market is no surprise. Now these firms are turning to global markets for additional opportunities, and their attention is increasingly fixed on China.

In the past, Chinese government regulation has prevented foreign private equity firms from buying up companies there. However, Chinese leaders recently found that the majority of the country's corporate financing still comes from bank loans, and they now apparently realize the need for a domestic private equity industry. Accordingly, the government has created new regulations to allow private equity players access to Chinese companies. Read More.

Time to prepare for the coming M&A wave

July 19 - China Daily (Commentary) - The continuous economic boom that has taken place in China over the last 28 years makes it a powerhouse of global prosperity. And now the country has become involved in the newest development of economic globalization.

The wave of mergers and acquisitions (M&As) among international businesses that has swept across the globe will ensure the rise of global corporations in the 21st century.

This explosion in M&As began in 2004 and peaked in 2006, when deals worth $3.5 trillion were inked. The deal-making has continued apace this year - M&A agreements involving $2 trillion were reached in the first four months of this year, up 60 percent from the same period last year.

The M&A deals range from the finance, electricity generation, property and media sectors to consumer goods. They have taken place in the US, Europe and many developing countries. Read More.