omniture

Total Value Sharply Soars with TMT Standing Out; Domestic Enterprises Dominate in Cross-border M&As

Zero2IPO
2008-07-23 22:26 916

BEIJING, July 23 /Xinhua-PRNewswire/ -- Zero2IPO Research Center -- the research arm of Zero2IPO Group -- recently published its “China Merger & Acquisition Report Q2 2008”. According to the report, 33 transactions were closed in TMT, Bio/healthcare and Energy industries, 25 of which disclosed a value of US$17.07B. In addition, there were 19 cross-border deals, nine of which disclosed a value of US$1.15B.

The report also summarizes the highlights of the Chinese M&A market during Q2’08:

Cross-border M&A Strongly Rebound with Domestic Enterprises Playing Leading Role

This quarter cross-border M&A deals regained an active growth momentum. A total of 19 cross-border deals finalized this quarter. Nine of these deals disclosed approximately US$1.15B, increased by 354.5% over Q1. Notably, ten (52.6% of the total) of these deal were launched by domestic enterprises; the value created by the ten deals represented 55.7% of the total quarterly value. By breakdown, large-size M&As launched by domestic capital were mainly concentrated on Mining, and Engineering Equipment sectors, whereas M&As launched by foreign capital were mainly converged on Internet and Software sub-sectors.

Table 1: Distribution of Cross-border Transactions by Quarter(1)

Total Deals Deals with Total Value Average Value

Disclosed (US$M)(2) (US$M)(3)

Value

2006Q1 12 9 1,091.95 121.33

2006Q2 9 4 998.45 249.61

2006Q3 23 14 2,477.55 176.97

2006Q4 26 16 4,521.02 282.56

2007Q1 15 10 1,036.96 103.70

2007Q2 19 15 2,127.59 141.84

2007Q3 18 9 1,645.67 182.85

2007Q4 32 29 13,858.89 477.89

2008Q1 10 5 253.14 50.63

2008Q2 19 9 1,150.50 127.83

Source: Zero2IPO Research Center

Note: 1. In Cross-border M&As, either the target company or the acquirer

is a Mainland China-based company.

2. Total Value refers to the total disclosed value for the deals

that disclosed value during a given period.

3. Average Value refers to the mean of “Total Value”.

Figure 1: Distribution of Cross-border Transactions by Quarter (US$M)

(Please Click the Link in the bottom of the release)

TMT Exhibits a Strong M&A Trend; Energy and Bio/healthcare Remain Active

Figure 2: M&As in TMT by Quarter

Please Click the Link in the bottom of the release)

The Zero2IPO Research Center focuses heavily on the TMT, Energy and Bio/healthcare sectors. Of these three sectors TMT was the most active with 21 deals closed. Fourteen of these deals disclosed an approximate value of US$16.28B and averaged US$1.16B. The mega deal of China Telecom Co., Ltd buying a total RMB110.00 billion China Unicom’s CDMA network substantially escalated the total value of TMT sector. This quarter over half of TMT M&As were concentrated on Internet and Software sub-sectors (To be exact, Internet and Software respectively accounts for 33.3% and 28.6% of the total TMT deals). In addition, Bio/healthcare remained relatively active with eight deals closed, seven of which disclosed a value of US$66.94M and averaged US$9.56M. In the Energy sector four deals were finalized with US$716.19M disclosed. The average value reached US$179.05M.

Table 2: Industrial Distribution of M&As (by Target)

Total Deals with Total Value Average Value

Deals Disclosed (US$M) (US$M)

Value

TMT 21 14 16,282.34 1,163.02

Energy 4 4 716.19 179.05

Bio/healthcare 8 7 66.94 9.56

Total 33 25 17,065.47 682.62

Source: Zero2IPO Research Center

VC/PE-related M&As Soar in Value

Four of the VC/PE-related M&As Zero2IPO analyzed closed this quarter. Of these four, three closed in Traditional and one in Broad IT. Notably, Zoomlion actively carried out M&A activities during this quarter.

Table 3: Industrial Distribution of VC/PE-related M&As

Sector Total Deals Deals with Total Value Average Value

Disclosed (US$M) (US$M)

Value

Broad IT 1 0 N/A N/A

Traditional 3 2 32.01 16.00

Total 4 2 32.01 16.00

Source: Zero2IPO Research Center

Note: The research scope of Zero2IPO Research Center covers:

a. At least one party involved in the deal is a Mainland-based company.

Here “party” refers to either a target company or an acquirer

b. Deals where acquirers take 20% or above of the target companies’ stake

c. The research scope of Zero2IPO Research Center covers:

(1) M&A activities in TMT, Bio/Healthcare and Energy sectors,

(2) Cross-border M&A transactions

(3) VC/PE-related M&A transactions

An equity transaction is included into our M&A research scope if it is between two enterprises and both of them are non-financial investors, with at least one party invested by a VC/PE. For transactions between two parties where at least one party is VC/PE are categorized into VC/PE research field.

For more information please click:

http://www.zero2ipo.com.hk/china_this_week/detail.asp?id=7032

About the Zero2IPO Research Center

Founded in November 2001, the Zero2IPO Research Center provides a full range of business research reports and customized research solutions for investment professionals in the Greater China Region. Our research ranges from Venture Capital, Private Equity, IPO, M&A to TMT industries. The Zero2IPO Research Center sets itself apart from competitors as the most prestigious research institute in the China’s VC and PE spheres.

Note about Citation

For any quotations, please note it is quoted from “China Enterprises IPO Report Q2 2008” and send two copies of your newspaper to:

Aileen Huang

Suite 1203, Tower A, Eagle Plaza, No. 26,

Xiaoyun Road, Chaoyang District, Beijing, 100125, China

Tel: +86-10-8458-0476 x8037

Or email the website link of your article to aileenhuang@zero2ipo.com.cn.

Source: Zero2IPO
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