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Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
Etude PwC sur les fusions-acquisitions chinoises (2014)
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Etude PwC sur les fusions-acquisitions chinoises (2014)

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Selon la dernière étude du cabinet d’audit et de conseil PwC, le montant des opérations de fusions-acquisitions impliquant au moins un acteur chinois a atteint un niveau record de 260 milliards de dollars en 2013, en hausse de 28 %, avec 43 transactions supérieures à 1 milliard de dollars, contre 30 en 2012. Le nombre de transactions a enregistré une forte progression sur les six derniers mois de l'année, avec une augmentation de plus de 40 % par rapport au premier semestre.

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  • 1. PwC M&A 2013 Review and 2014 Outlook 22 January 2014 David Brown Transaction Services Leader, PwC China and Hong Kong
  • 2. Foreword – explanation of data shown in this presentation (1 of 2) • The data presented is based on information compiled by ThomsonReuters, ChinaVenture and PwC analysis unless stated otherwise • Thomson Reuters and ChinaVenture record announced deals. Some announced deals will not go on to complete • The deal volume figures presented in this report refer to the number of deals announced, whether or not a value is disclosed for the deal • The deal value figures presented in this report refers only to those deals where a value has been disclosed (referred to in this presentation as “disclosed value”) • “Domestic” means China including Hong Kong and Macau • “Outbound” relates to mainland China company acquisitions abroad • “Inbound” relates to overseas company acquisitions of Domestic companies, • “Private Equity deals” or “PE deals” refer to financial buyer deals with deal value over US$10mn and/or with undisclosed deal value but invested by PEs PwC 2
  • 3. Foreword – explanation of data shown in this presentation (2 of 2) • “VC deals” refer to financial buyer deals with deal value less than US$10mn and/or with undisclosed deal value but invested by VCs • “Strategic buyer” refers to corporate buyers (as opposed to financial buyers) that acquire companies with the objective of integrating the acquisition in their existing business • “Financial buyer” refers to investors that acquire companies with the objective of realizing a return on their investment by selling the business at a profit at a future date and mainly, but not entirely, comprise PE and VC funds • In order to exclude foreign exchange impact, deal values from 2008 to 2012 were adjusted based on 2013 average Rmb/US$ exchange rate PwC 3
  • 4. Overview PwC
  • 5. Key messages (1 of 2) Overall • China deal numbers recovered from multi-year lows in the first half of 2013, increasing by more than 40% in the second half; nearly all categories of M&A showed strong growth • On an annualised basis – despite the quiet first half – overall deal volumes grew by 8% and values by 28% in 2013 compared to 2012; deal values reached a record high at US$260 billion with 43 deals greater than US$1 billion in 2013, compared to 30 in 2012 China Outbound • China outbound M&A recovered with more deals announced in the second half of 2013 than in any earlier half-year period; and on a full-year basis, outbound M&A compared well with the last few years, although the soft first half meant no new records in 2013 • POE activity was surprisingly low in the first half but rebounded to a new six-month high with 88 announced deals in the second half, whilst SOE activity was robust and deal values held up well • SOEs continued to focus on E&P, resources (raw materials) and industrial sectors, whilst POE activity was more diversified covering also industrial technologies, consumer related businesses and high-tech • Destination markets were remarkably similar to 2012 with much of the POE money targeting established technologies, know-how, IP and brands in mature markets such as the US and Europe PwC 5
  • 6. Key messages (2 of 2) Domestic and Foreign-Inbound Strategic • Domestic strategic M&A recovered strongly in the second half of 2013, although full year numbers were less spectacular due to the slow first half which was affected by political and economic uncertainties • Foreign inbound M&A was flat; Japanese investment has declined sharply over the last two years as has investment from the US Private Equity • Renminbi PE fundraising declined for the second straight year as the domestic Chinese PE industry continued to consolidate; US$ denominated fundraising has been consistently healthy over the same period • The number of new investments recovered in the second half of the year and, on a full year basis, deal values held up well • Growth capital deals declined as the PE industry shifted focus towards PIPE and, increasingly, buy-out transactions whilst PE interest in outbound deals continued, albeit still at low levels in absolute terms • PE-backed IPOs showed some recovery in the second half of 2013 off a very low base but it was the third straight year of decline for PE exits, almost entirely attributable to problems in the equity capital markets; 2013 was the first year that IPO was not the dominant exit-route • The overhang of new investments compared to exits remains the number one issue affecting the PE and VC industry PwC 6
  • 7. Outlook • We anticipate strong growth in China outbound, both from SOEs and POEs; 2014 will be a record year driven by increasing experience and sophistication of Chinese buyers, underpinned by government support and direction (including SOE reform – see below) • Domestic M&A will also grow to new highs, driven by industry consolidation and sector reforms which will increase competitive pressures; A-share listed companies will be important drivers of this activity • Foreign inbound investment will also grow as confidence returns in overseas markets especially in Europe and the US, and as MNC’s realign their China strategies resulting in both sale and purchase of business units and an increasing number of JVs with Chinese partners • PE exits will rebound strongly as IPO markets re-open, but sale by M&A will also grow and we expect to see more secondary (PE to PE) activity; we also think that the number of new investments will increase with the trend to buy-outs continuing; although smaller in number, we will see more outbound PE deals and we expect to see some PE interest in investing in SOEs (see below) and in A-share listed companies • SOE reform, including market liberalisation, specialisation, globalisation and diversified shareholding will drive M&A activity across several of the sectors described above • In summary, we see strong tail-winds for M&A in China: the record trends seen in the second half of 2013 will continue into 2014 • Drivers of this activity will include: further liberalisation of markets; SOE reforms; government support for M&A generally – especially outbound; increasing direct investment activities of large financial institutions; market-driven industry consolidation; increasing sophistication of Chinese buyers; and recovering equity capital markets PwC 7
  • 8. China deal numbers recovered from multi-year lows in the first half of 2013, increasing by more than 40% in the second half; nearly all categories of M&A showed strong growth Total deal volume, 2013 vs. 2012 (half yearly) 1H12 Volume 2H12 Volume 1H13 Volume 2H13 Volume % Diff 2H13 v s 2H12 % Diff 2H13 v s 1H13 St rat egic buy ers Dom estic Foreign Tot al St rat egic buy ers 1 ,1 7 7 1 52 1,329 1 ,4 9 0 1 34 1,624 1 ,09 6 1 23 1,219 1 ,6 08 1 52 1,7 60 8% 13% 8% 47% 24% 44% Financial buy ers Priv ate Equity VC Tot al Financial buy ers 1 64 220 384 1 68 2 53 421 1 62 27 6 438 2 05 462 667 22% 83% 58% 27% 67% 52% China mainland Out bound SOE POE Tot al China mainland Out bound 26 70 96 22 73 95 28 53 81 31 88 119 41% 21% 25% 11% 66% 47% HK Out bound 67 99 88 76 (23%) (14%) 1,87 6 2,239 1,826 2,622 17% 44% Tot al Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 8
  • 9. On an annualised basis – despite the quiet first half – overall deal volumes grew by 8% and values by 28% in 2013 compared to 2012; deal values reached a record high … Total deal volume and value, from 2008 to 2013 2008 Volume 2009 Value Volume 2010 Value Volume 2012 2011 Value Volume Value Volume 2013 Value Volume Value % Diff % Diff volume value 2013 vs. 2013 vs. 2012 2012 Strategic buyers Domestic Foreign Total Strategic buyers 3,006 61 4 3,620 1 53.2 1 9.7 172.9 2,7 7 4 409 3,183 1 02.1 1 1 .5 113.6 2,947 539 3,486 1 42.8 1 8.3 161.1 3,262 482 3,744 1 1 9.9 1 7 .6 137.5 2,667 286 2,953 89.6 9.2 98.8 2,7 04 27 5 2,979 1 48.1 1 5.1 163.2 1% -4% 1% 65% 63% 65% Financial buyers Priv ate Equity VC Total Financial buyers 365 694 1,059 22.4 1 .8 24.2 254 712 966 22.8 1 .8 24.6 425 1 ,01 1 1,436 25.4 2.6 27.9 502 903 1,405 32.6 1 .9 34.5 332 47 3 805 23.9 1 .0 24.9 367 7 38 1,105 35.0 0.9 35.9 11% 56% 37% 46% -12% 44% China mainland Outbound SOE POE Total China mainland Outbound 27 99 126 6.9 3.7 10.5 45 99 144 26.8 6.6 33.4 64 1 24 188 35.2 6.6 41.8 48 1 58 206 33.6 9.6 43.2 48 1 43 191 40.4* 26.0 66.4 59 1 41 200 39.5 1 2.0 51.5 23% -1% 5% -2% -54% -22% HK Outbound 156 6.8 152 6.3 171 19.2 183 8.4 166 13.0 164 9.6 -1% -26% 4,961 214.4 4,445 177.9 5,281 250.0 5,538 223.5 4,115 203.1 4,448 260.2 8% 28% Total (US$bn ) (US$bn ) (US$bn ) (US$bn ) (US$bn ) (US$bn ) * CNOOC’s US$15 bn Nexon deal was announced in 2012 and so is included in 2012 numbers, although it was completed in 2013 Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 9
  • 10. … deal values reached a record high with 43 deals greater than US$1 billion in 2013, compared to 30 in 2012 Deal value by main category US$ billion 250 51.5 200 41.8 10.5 43.2 22.4 19.7 150 33.4 18.3 32.6 66.4 15.1 17.6 22.8 23.9 11.5 100 35.0 25.4 9.2 153.2 142.8 102.1 50 148.1 119.9 89.6 0 2008 2009 Domestic Strategic Buyers 2010 Foreign Strategic Buyers 2011 Private Equity Deals 2012 2013 China Mainland Outbound Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 10
  • 11. Strategic buyers PwC 11
  • 12. Domestic strategic M&A recovered strongly in the second half of 2013 … Strategic buyer deals, 2013 vs. 2012 (half yearly) No. US$ billion 2,000 120 1,800 98.5 1,600 1,400 100 80 1,200 1,000 800 600 54.0 1,177 1,608 40 35.6 1,096 20 6.7 8.4 4.0 152 5.2 134 123 152 1H2012 0 60 1,490 400 200 49.6 2H2012 1H2013 2H2013 Announced Deal Volume Inbound Announced Deal Value Inbound 0 Announced Deal Volume Domestic Announced Deal Value Domestic Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 12
  • 13. … although full year numbers were less spectacular due to the slow first half which was affected by political and economic uncertainties Strategic buyer deals, from 2008 to 2013 No. US$ billion 4,000 180 3,500 160 153.2 142.8 148.1 3,000 2,000 120 119.9 2,500 3,006 102.1 2,947 100 3,262 2,774 89.6 2,667 1,500 2,704 80 60 1,000 500 140 40 19.7 18.3 614 11.5 409 539 2008 2009 2010 17.6 482 9.2 286 275 2011 2012 Announced Deal Volume Inbound Announced Deal Value Inbound 20 2013 0 15.1 0 Announced Deal Volume Domestic Announced Deal Value Domestic Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 13
  • 14. Strategic M&A activity by industry was broadly consistent with earlier years, although technology and financial services deals showed some upward trends Strategic buyer deal volume by industry sector No. 4000 3500 970 743 3000 2500 1125 358 432 2000 1500 1000 522 372 1015 106 404 381 310 664 252 137 369 446 320 539 614 529 428 475 2008 2009 2010 500 653 264 500 300 273 384 697 315 402 395 352 668 400 404 570 429 575 439 434 2011 2012 2013 0 Industrials Raw Materials High Technology Consumer Related Real Estate Financial Services Others Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 14
  • 15. Foreign inbound M&A was flat; Japanese investment has declined sharply over the last two years as has investment from the US No. 650 Foreign strategic buyer deal volume by region of origin 600 550 500 450 400 70 350 300 70 127 92 250 67 200 87 150 29 100 50 124 67 35 23 73 54 31 79 27 46 35 48 66 67 98 89 0 2008 SE Asia UK Latin America 2009 Japan British Virgin/Cayman Other Europe 2010 EU Oceania Russia 2011 25 26 34 37 53 94 58 2012 US Canada n.a. 2013 Other Asia Africa Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 15
  • 16. European investors did the biggest value inbound deals, as they have for three out of the last six years Foreign strategic buyer deal value by region of origin US$ billion 25 20 15 0.5 3.0 0.3 10 5 0.2 2.0 0.8 2.1 3.4 4.3 3.6 0 2008 EU Oceania Canada 0.4 2.4 0.2 1.8 1.0 0.8 2009 SE Asia British Virgin/Cayman Other Europe 2.9 1.6 5.3 0.3 0.5 0.7 0.9 0.3 1.2 0.4 1.8 5.9 2010 2011 US UK Japan Africa Other North Amercia Russia 0.1 1.2 1.3 3.4 3.6 7.1 1.0 1.3 2012 2013 Other Asia South America n.a. Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 16
  • 17. PE PwC 17
  • 18. Renminbi PE fundraising declined for the second straight year as the domestic Chinese PE industry continued to consolidate; US$ denominated fundraising has been consistently healthy over the same period PE/VC fund raising for China investment* No. US$ billion 60 * Excludes PEs investing in China from non-region specific funds 300 277 250 50 249 21.8 200 40 172 165 150 21.1 14.9 123 39.8 100 130 20 30 20 31.8 9.5 50 21.0 20.3 10 13 4.5 6.7 2008 0 2009 0 Renminbi Fund Size 2010 2011 Non-renminbi Fund Size 2012 2013 Fund Volume Source: AVCJ and PwC analysis PwC 18
  • 19. The number of new investments recovered in the second half of the year … Private Equity deals, 2013 vs. 2012 (half yearly) No. US$ billion 18.5 300 20 16.5 250 18 16 15.1 14 200 12 150 8.8 10 8 205 100 168 164 162 6 4 50 2 0 0 1H2012 2H2012 Announced Deal Volume 1H2013 2H2013 Announced Deal Value Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 19
  • 20. … and on a full year basis, deal values held up well Private Equity deals, from 2008 to 2013 No. US$ billion 550 40 500 400 350 35.0* 32.6 450 30 25.4 22.4 25 22.8 23.9 300 20 502 250 200 425 365 150 35 332 367 15 10 254 100 5 50 0 0 2008 2009 2010 Announced Deal Volume Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 2011 2012 2013 Announced Deal Value * Includes US$9.8 bn Taikang and Guolian investment in Petrochina’s West Pipeline JV 20
  • 21. PE investors’ industry focus was broadly consistent with earlier years; we think TMT and healthcare sectors will grow in importance PE deal volume by industry sector No. 550 500 450 400 13 30 350 8 47 300 250 14 33 200 40 150 60 100 12 20 23 32 77 45 50 2008 98 2009 72 124 54 50 0 34 31 54 Industrials Healthcare Materials 31 31 24 46 44 32 58 45 67 73 88 90 2010 2011 Consumer related Real Estate Retail Media and Entertainment Financial Services Others 42 2012 82 2013 High Technology Energy and Power Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 21
  • 22. Growth capital deals declined as the PE industry shifted focus towards PIPE and, increasingly, buy-out transactions … PE deal volume by type No. 550 16 500 450 400 350 13 15 118 29 85 18 21 300 132 51 200 150 68 4 250 329 368 327 246 199 100 206 50 0 2008 2009 2010 Growth 2011 PIPE 2012 2013 Buyout Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 22
  • 23. … whilst PE interest in outbound deals continued, albeit still at low levels in absolute terms China mainland PE backed outbound deal volume by PE category No. 30 25 20 20 15 18 7 23 10 8 11 5 8 4 8 4 3 0 2008 2009 2010 SWFs 2011 2012 2013 Other PEs Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 23
  • 24. PE-backed IPOs showed some recovery in the second half of 2013 off a very low base … PE/VC backed deal exit volume by type, 2013 vs. 2012 (half yearly) No. 140 120 3 100 48 5 80 60 5 44 1 34 40 64 51 20 34 29 6 0 1H2012 2H2012 IPO 1H2013 M&A - trade 2H2013 M&A - PE Source: AVCJ and PwC analysis PwC 24
  • 25. … but it was the third straight year of decline for PE exits, almost entirely attributable to problems in the equity capital markets; 2013 was the first year that IPO was not the dominant exit-route PE/VC backed deal exit volume by type No. 350 8 300 6 83 250 91 200 8 5 150 92 84 100 7 212 171 85 44 50 6 98 88 46 35 0 2008 2009 2010 IPO 2011 M&A - trade 2012 2013 M&A - PE Source: AVCJ and PwC analysis PwC 25
  • 26. The overhang of new investments compared to exits remains the number one issue affecting the PE and VC industry PE/VC deal volume vs. No. of exits No. 1,500 1,400 1,300 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 0 425 502 367 365 254 332 1,011 738 712 694 212 2009 97 2010 VC deals 473 171 91 88 89 46 51 2008 903 PE deals 98 100 2011 M&A exit 2012 35 91 2013 IPO exit Source: ThomsonReuters, ChinaVenture, AVCJ and PwC analysis PwC 26
  • 27. China mainland outbound PwC 27
  • 28. China outbound M&A recovered with more deals announced in the second half of 2013 than in any earlier half-year period … China mainland outbound deals, 2013 vs. 2012 (half yearly) No. US$ billion 140 45 41.8 * 40 120 35 100 28.5 80 30 24.6 23.0 60 119 96 95 20 15 81 40 25 10 20 5 0 0 1H2012 2H2012 Announced Deal Volume 1H2013 2H2013 Announce Deal Value * Includes US$15.1 bn CNOOC – Nexus transaction Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 28
  • 29. … and on a full-year basis, outbound M&A compared well with the last few years but the soft first half meant no new records in 2013 China mainland outbound deals, from 2008 to 2013 No. US$ billion 250 70 66.4 * 51.5 200 60 50 150 43.2 41.8 33.4 100 188 206 191 200 144 126 50 40 30 20 10.5 10 0 0 2008 2009 2010 Announced Deal Volume 2011 2012 2013 Announce Deal Value * Includes US$15.1 bn CNOOC – Nexus transaction Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 29
  • 30. POE activity was surprisingly low in the first half but rebounded to a new six-month high with 88 announced deals in the second half … China mainland outbound strategic buyer deals, 2013 vs. 2012 (half yearly) US$ billion 30 No. 140 120 24.0 25 100 80 31 20.7 22 26 18.8 17.9 15 28 60 16.4 40 20 88 70 73 8.1 20 7.8 53 10 5 4.2 0 0 1H2012 2H2012 1H2013 2H2013 POE Announced Deal Volume SOE Announced Deal Volume POE Announced Deal Value SOE Announced Deal Value Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 30
  • 31. … whilst SOE activity was robust and deal values held up well China mainland outbound strategic buyer deals, from 2008 to 2013 US$ billion 45 No. 250 40.4 * 35.2 200 39.5 33.6 35 48 26.8 150 64 48 59 26.0 45 20 100 158 124 99 6.9 15 143 9.6 2009 2010 10 5 6.6 3.7 2008 0 2011 2012 POE Announced Deal Volume 2013 SOE Announced Deal Volume POE Announced Deal Value SOE Announced Deal Value Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 141 12.0 99 6.6 0 30 25 27 50 40 * Includes US$15.1 bn CNOOC – Nexus transaction 31
  • 32. SOEs continued to focus on E&P, resources (raw materials) and industrial sectors, whilst POE activity was more diversified covering also industrial technologies, consumer related businesses and high-tech China mainland outbound deals by industry sector No. 50 –By number of deals, 2013 vs. 2012 45 40 35 30 30 25 33 20 5 0 18 26 15 10 33 17 10 18 15 6 28 22 17 5 11 13 1 2013 SOE 15 1 2013 POE 4 10 10 2 2012 SOE 5 1 6 2 14 7 3 1 4 2 2012 POE Source: ThomsonReuters, ChinaVenture and PwC analysis PwC 32
  • 33. Destination markets were remarkably similar to 2012 with much of the POE money targeting established technologies, know-how, IP and brands in mature markets such as the US and Europe Outbound M&A deal volume by region of destination 2013 vs. 2012 North America 57 Europe 57 51 Russia 63 Asia 8 5 25 33 8 11 South America 9 8 27 29 Africa Oceania 2012 2013 Source: ThomsonReuters and PwC analysis PwC 33
  • 34. Key messages and 2014 outlook PwC 34
  • 35. Key messages (1 of 2) Overall • China deal numbers recovered from multi-year lows in the first half of 2013, increasing by more than 40% in the second half; nearly all categories of M&A showed strong growth • On an annualised basis – despite the quiet first half – overall deal volumes grew by 8% and values by 28% in 2013 compared to 2012; deal values reached a record high at US$260 billion with 43 deals greater than US$1 billion in 2013, compared to 30 in 2012 China Outbound • China outbound M&A recovered with more deals announced in the second half of 2013 than in any earlier half-year period; and on a full-year basis, outbound M&A compared well with the last few years, although the soft first half meant no new records in 2013 • POE activity was surprisingly low in the first half but rebounded to a new six-month high with 88 announced deals in the second half, whilst SOE activity was robust and deal values held up well • SOEs continued to focus on E&P, resources (raw materials) and industrial sectors, whilst POE activity was more diversified covering also industrial technologies, consumer related businesses and high-tech • Destination markets were remarkably similar to 2012 with much of the POE money targeting established technologies, know-how, IP and brands in mature markets such as the US and Europe PwC 35
  • 36. Key messages (2 of 2) Domestic and Foreign-Inbound Strategic • Domestic strategic M&A recovered strongly in the second half of 2013, although full year numbers were less spectacular due to the slow first half which was affected by political and economic uncertainties • Foreign inbound M&A was flat; Japanese investment has declined sharply over the last two years as has investment from the US Private Equity • Renminbi PE fundraising declined for the second straight year as the domestic Chinese PE industry continued to consolidate; US$ denominated fundraising has been consistently healthy over the same period • The number of new investments recovered in the second half of the year and, on a full year basis, deal values held up well • Growth capital deals declined as the PE industry shifted focus towards PIPE and, increasingly, buy-out transactions whilst PE interest in outbound deals continued, albeit still at low levels in absolute terms • PE-backed IPOs showed some recovery in the second half of 2013 off a very low base but it was the third straight year of decline for PE exits, almost entirely attributable to problems in the equity capital markets; 2013 was the first year that IPO was not the dominant exit-route • The overhang of new investments compared to exits remains the number one issue affecting the PE and VC industry PwC 36
  • 37. Outlook • We anticipate strong growth in China outbound, both from SOEs and POEs; 2014 will be a record year driven by increasing experience and sophistication of Chinese buyers, underpinned by government support and direction (including SOE reform – see below) • Domestic M&A will also grow to new highs, driven by industry consolidation and sector reforms which will increase competitive pressures; A-share listed companies will be important drivers of this activity • Foreign inbound investment will also grow as confidence returns in overseas markets especially in Europe and the US, and as MNC’s realign their China strategies resulting in both sale and purchase of business units and an increasing number of JVs with Chinese partners • PE exits will rebound strongly as IPO markets re-open, but sale by M&A will also grow and we expect to see more secondary (PE to PE) activity; we also think that the number of new investments will increase with the trend to buy-outs continuing; although smaller in number, we will see more outbound PE deals and we expect to see some PE interest in investing in SOEs (see below) and in A-share listed companies • SOE reform, including market liberalisation, specialisation, globalisation and diversified shareholding will drive M&A activity across several of the sectors described above • In summary, we see strong tail-winds for M&A in China: the record trends seen in the second half of 2013 will continue into 2014 • Drivers of this activity will include: further liberalisation of markets; SOE reforms; government support for M&A generally – especially outbound; increasing direct investment activities of large financial institutions; market-driven industry consolidation; increasing sophistication of Chinese buyers; and recovering equity capital markets PwC 37
  • 38. Data compilation methodology PwC 38
  • 39. Data compilation methodology: Statistics contained in this presentation and the press release may vary from those contained in previous press releases. There are three reasons for this: ThomsonReuters and ChinaVenture historical data is constantly updated as deals are confirmed or disclosed; PricewaterhouseCoopers has excluded certain transactions which are more in the nature of internal reorganisations than transfers of control; and exchange rate data has been adjusted. Included Deals • Acquisitions of private/public companies resulting in change of control • Investments in private/public companies (involving at least 5% ownership) • Mergers • Buyouts/buyins (LBOs, MBOs, MBIs) • Privatisations • Tender offers • Spinoffs • Splitoff of a wholly-owned subsidiary when 100% sold via IPO • Divestment of company, division or trading assets resulting in change of control at parent level • Reverse takeovers • Re-capitalisation • Joint Venture buyouts • Joint Ventures • Receivership or bankruptcy sales/auctions • Tracking stock PwC Excluded Deals • Property/real estate for individual properties • Rumoured transactions • Options granted to acquire an additional stake when not 100% of the shares has been acquired • Any purchase of brand rights • Land acquisitions • Equity placements in funds • Stake purchases by mutual funds • Open market share buyback/retirement of stock unless part of a privatisation • Balance sheet restructuring or internal restructuring • Investments in greenfield operations • Going private transactions 39
  • 40. © 2014 PricewaterhouseCoopers Limited. All rights reserved. “PwC” refers to PricewaterhouseCoopers Limited or, as the context requires, the PwC global network or other member firms of the network, each of which is a separate legal entity.

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