Fusions & acquisitions chinoises (2011)

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Fusions & acquisitions chinoises (2011)

  1. 1. M&A 2011 Review and2012 Outlook Press BriefingPwC Greater China Private Equity Group Leader David Brown q y pPwC Hong Kong Advisory Partner Christopher Chan13 Jan 2012
  2. 2. Foreword – explanation of data shown in thispresentation (1/2)• The data presented is based on information compiled by ThomsonReuters, ChinaVenture and PwC analysis unless stated otherwise Chi d C l i l d h i• 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 abroadPwC 2
  3. 3. Foreword – explanation of data shown in thispresentation (2/2)• “Strategic buyer” refers to corporate buyers (as opposed to financial buyers) that acquire companies with the objective of integrating the acquisition i h i i i h h bj i fi i h i i i into their existing business• “Financial buyer” refers to investors that acquire companies with the objective of realising a return on their investment by selling the business at a bj ti f li i t th i i t tb lli th b i t profit at a future date and mainly, but not entirely, comprise PE and VC funds• 1HXX means first six calendar months of 20XX• 2HXX means second six calendar months of 20XXPwC 3
  4. 4. Key messages• Overall China M&A activity in 2011 was up 5% compared to the previous year to 5 364 transactions – the highest annual total ever year, 5,364• China Outbound continued its inexorable rise climbing to a new record of 207 deals (up by 10%) worth US$42.9bn (up by 12%)• 2011 was a record year f Private Equity, with 437 l d for i i ih larger sized d l i d deals (defined as greater than US$10mn) up by 18%, valued at US$31.2bn up by 33%)• D Domestic strategic M&A powered ahead by 11% with 3,262 d l ti t t i d h db % ith 6 deals• But foreign strategic buyers pulled in their horns, falling by 11% to 482 transactions due to fewer deals done in the second half of 2011• We expect these trends to continue into 2012, despite challenging global economic conditionsPwC 4
  5. 5. Overall China M&A activity in 2011 was up 5% compared to the previous year, to 5,364 transactions – the highest annual total ever Total deal volume and value, from 2008 to 2011 % Diff 2008 2009 2010 1H11 2011 volume 2010 vs. Volume Value Volume Value Volume Value Volume Value Volume Value 2011Strategic buyers (US$bn) (US$bn) (US$bn) (US$bn) (US$bn) Domestic 3,006 136.7 2,774 92.6 2,947 130.6(1) 1,570 54.0 3,262 114.9 11% Foreign 614 17.6 409 10.4 539 16.8 267 8.0 482 16.9 -11%Total Strategic buyers 3,620 154.3 3,183 103.1 3,486 147.4 1,837 62.0 3,744 131.8 7%Financial buyers Deal size > US$10 million 335 20.0 228 20.6 371 23.5 210 16.7 437 31.2 18% Deal size < US$10 million or undisclosed 724 1.6 738 1.6 1,066 2.3 562 1.0 976 1.8 -8%Total Financial buyers 1,059 21.6 966 22.3 1,437 25.8 772 17.8 1,413 33.0 -2%Outbound 126 9.4 144 30.3 188 38.2 101 9.4 207 42.9 10%Total 4,805 185.3 4,293 155.7 5,111 211.4 2,710 89.2 5,364 207.7 5% Source: ThomsonReuters, ChinaVenture and PwC analysis (1) Including 2 banking deals and 1 auto deal for US$14.2bn PwC 5
  6. 6. China Outbound continued its inexorable rise climbing toa new record of 207 deals (up by 10%) worth US$42.9bn(up by 12%) Outbound investment from China, from 2008 to 2011 No. US$ billion 120 40.0 40 0• Outbound activity by mainland Chinese buyers continued to grow 100 (2) 35.0 strongly, with growth of 10% by deal 30.0 number and 12% in deal value 80• Both deal numbers and deal values 25.0 hit new records, continuing a trend 60 (1) 20.0 seen over the past several years 15.0• 16 deals with a value exceeding 40 US$1bn were announced in 2011, 10.0 compared to 12 for 2010, of which 14 20 5.0 were in the resources and energy sectors - 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 - Announced Volume Disclosed Deal Value Source: ThomsonReuters and PwC analysis y (1) Including 3 energy deals for US$10.8bn (2) Including 5 energy deals for US$16bnPwC 6
  7. 7. Outbound resources and energy deals continue to dominate; but the industrial and consumer sectors grew strongly as Chinese companies continue to seek processes, know-how, know how IP and brands to bring back to ChinaOutbound deal volume by industry 2010 Outbound deal volume by industry 2011 5 Others Media and 9% Others Entertainment Retail Retail 2% 3% Media and Healthcare 1% 2% 3% Entertainment 3% Financial Services Healthcare 5% Raw materials 4 17 4% 34 6 27% Financial Services 5 Raw materials 7 36% 2% 7 56 11 High Technology 3 67 9%High Technology 13% 24 19 18 25 Energy and Power 30 18 15% 39 Energy and Power 9% 32 Industrials Industrials 19% Consumer Related 13% 9% Consumer Related Note: Raw materials include mining, metals and chemicals. 16% Source: ThomsonReuters and PwC analysis• Deals in the resources and energy sectors continued to dominate, representing 42% of the number of outbound transactions on a combined basis compared to 44% in 2010. This sector also accounted for 83% of deal values and 14 out of the 16 deals valued at over US$1 bn• However, the industrial and consumer sectors also grew strongly (35% of deals compared to 22% in 2010) PwC 7
  8. 8. The search for leading technologies, know-how and brands know how was reflected in the active geographies with developed economies such as North America and Europe accounting for nearly half of all outbound transactions Outbound investment by region 2010 vs. 2011• Europe emerged as a key destination in 2011, up 76% on 2010, which reflected the North America Europe Asia outbound M&A trends in the industrial b Russia and consumer sectors• With 56 announced deals, Asia represented 31 the second largest Chinese outbound M&A 52 57 25 44 investment destination in 2011. Roughly 2011 55 56 6 half of these transactions were into Japan and Singapore with 16 and 11 deals 17 5 10 respectively 9 27 34• Th number of t The b f transactions i th southern ti in the th Africa hemisphere, of which nearly three quarters Oceania were energy and resources related, remained South America relatively stable with 49 announced deals in 2011 compared to 53 in 2010 2010 2011 Source: ThomsonReuters and PwC analysis PwC 8
  9. 9. 2011 was a record year for Private Equity, with 437 larger sized deals (defined as greater than US$10mn), an increase of 18%, valued at US$31.2bn - up 33%• PE is emerging as a key provider of capital to the private Total PE deals > US$10 million, from 2008 to 2011 sector of Chinas economy No. US$ billion 250 18.0• 2011 was a very strong year for PE driven by a number of factors: 16.0 (1) Demand f D d from SME f growth capital, since such SMEs for th it l i h 200 14.0 companies struggled to access bank financing or local (2) capital markets and funding from the grey lending 12.0 market is expensive 150 10.0 Low stock market valuations leading to opportunities for private investment in publicly listed equity (PIPE) deals 8.0 100 Some activity around Chinese companies with troubled overseas listings, especially the US 6.0• Deal sizes increased with 50 deals larger than US$100mn in increased, 50 4.0 40 2011 compared to 47 in 2010. The overall value of these deals increased by 33% to US$20bn; overall capital invested, at 2.0 US$33bn, was a record - -• Although the emergence of the domestic Chinese PE industry g g y 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 is a key trend, 6 out of the 10 biggest China PE deals in 2011 Source: ThomsonReuters, ChinaVenture and PwC analysis Announced Volume Disclosed Deal value were carried out by overseas PEs, who continue to play an (1) Including 23 deals larger than US$100mn active role in the market (2) Including 2 banking deal s for US$9.7bn 9 PwC
  10. 10. Larger sized Private Equity deals mainly covered theindustrial and consumer sectors with PE buyers targetingbusinesses which could benefit from increased domesticconsumption Financial buyer Deals (>=US$10mn)– Top 10 sectors by Financial buyer Deals (>=US$10mn)– Top 10 sectors by number of deals, 2010 vs. 2011 deal value (US$ billion), 2010 vs. 2011 8.8 114 Consumer relatedConsumer related 7.2 90 7.2 76 Financial Services Industrials I d i l 2.3 81 65 3.4 Media and Industrials Entertainment 26 5.7 (1) 46 3.3 High Technology Media and Entertainment 29 0.9 36 2.2Energy and Power Energy and Power 34 1.3 27 1.4 Materials High Technology 36 1.1 24 1.3 Healthcare Materials 38 1.2 15 1.0Financial Services Real Estate 14 0.6 11 0.9 Real Estate Healthcare 6 1.4 2011 2010 2011 2010 11 0.9 Retail Retail 7 0.5 Note: Raw Materials include mining, metals and chemicals. Source: ThomsonReuters, ChinaVenture and PwC analysisPwC (1) Including 2 logistics deals for US$1.9bn 10
  11. 11. Private Equity fundraising reached record highs in2011, with Rmb funds accounting for 60%; exits held uprelatively well in the face of difficult market conditions PE/VC fund raising for Chinese investment• The PE industry raised US$44.1bn allocated for from 2008 to 2011 US$ billion China investment, a new record 50.0 45.0• 60% of the funds raised were Renminbi 40.0 17.6 1 6 35.0 denominated, continuing the growth trend of the 30.0 past two years 25.0 11.1 20.0 15.0 6.4• Exits held up relatively well despite difficult 10.0 18.0 19.3 26.6 market conditions: 5.0 5.8 58 12.7 - 185 PE/VC backed IPOs, compared to 220 in 2008 2009 2010 2011(E) 2010 Foreign currency f und PE/VC backed IPO’s and exits by type from 2008 to 2011 Rmb f und No. Most of the decline was due to fewer listings in 250 26 the US whose IPO window was effecti el hose indo as effectively 200 35 closed since August 2011 150 Increasing importance of trade and secondary 100 220 185 sales, with 35 exits by M&A an increase of 35% 16 50 16 73 36 - 2008 2009 2010 2011(E) IPO Trade sale/Secondary sale Source: ChinaVenture 11PwC
  12. 12. Domestic strategic M&A powered ahead by 11% with3,262 deals, but foreign strategics pulled in their horns,falling by 11% to 482 transactions due to fewer deals donein the second half of 2011• Strategic (corporate) transaction levels grew by 7% Strategic buyers deal volume and value, 2008 to 2011 to 3,744 compared to 2010, surpassing the No. US$ billion previous record set in 2008 2,500 120.0• Domestic strategic M&A still dominates, 100.0 accounting for 87% of the total strategic deal 2,000 volume, with 3,262 transactions, up 11% over last 80.0 y year at record levels 1,500 1 500 (1)• However, after a rebound in 2010, the number of 60.0 transactions announced by foreign corporates 1,000 dropped by 11% in 2011 as overseas buyers 40.0 responded to uncertain economic conditions in their home markets; several of the larger foreign 500 20.0 deals announced were in the consumer sector as overseas companies sought access to China’s - - 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 p domestic consumption Announced Volume Domestic Announced Volume Inbound Disclosed Deal value Domestic Disclosed Deal value Inbound Disclosed Deal value Total Source: ThomsonReuters, ChinaVenture and PwC analysis (1) Including 1 banking deal and 1 retail deal for US$6.7bn 12PwC
  13. 13. Strategic buyer deals continue to be spread widelyamong sectors, with some strong activity in real estate inresponse to financing difficulties in the sectorStrategic buyer Deals – Top 10 sectors by number Strategic buyer Deals – Top 10 sectors by deal valueof deals, 2010vs. 2011 (US$ billion), 2010 vs. 2011 668 21.6 Raw materials Real Estate 614 20.5 575 21.5 21 5 Industrials Raw materials 475 28.2(1) 500 17.6 Consumer related Industrials 446 18.1 395 15.7 High Technology Financial Services 320 20.8 (2) 384 11.9 Real Estate High Technology 369 4.9 272 Energy and Power 10.8 248 Consumer related 10.5 252 Financial Services 9.3 93 137 Energy and Power 10.5 190 Healthcare Media and 7.6 179 Entertainment 4.6 Media and 179 Entertainment 124 4.7 Retail 4.3 2011 2010 151 2011 2010 Retail 123 4.6 Healthcare 2.8 Note: Raw Materials include mining, metals and chemicals. (1) Including 4 domestic materials deals for US$7.4bn Source: ThomsonReuters, ChinaVenture and PwC analysis (2) Including 2 domestic banking deals for US$10.1bnPwC 13
  14. 14. Outlook: Growth in China related M&A is anticipated tocontinue (1/3)Overall• Predictions are difficult given turmoil in global markets, however continuing growth in China related M&A is still expected in 2012 overallOutbound• Outbound activity will continue its double-digit growth, driven by: Increasing maturity and experience of Chinese buyers Buying opportunities resulting from global economic turbulence, especially in Europe Continuing strategic push for resources, energy, but also industrial and consumer processes and brands to bring back to the China market Chinese companies looking to expand overseas for their own growth strategiesPwC 14
  15. 15. Outlook: Growth in China related M&A is anticipated tocontinue (2/3)Private Equity• An ever maturing PE industry has emerged as a key provider of capital to Chinas private sector: Although many PEs are treading carefully, this demand for capital will g y g y, p continue to drive investment activity and we cautiously predict single digit growth for larger sized PE deals (defined as greater than US$10mn) despite the record levels achieved in 2011 However, we also expect to see some consolidation, with some weaker or less established PEs withdrawing from the market, and fundraising will be more challenging Exit by E it b IPO will remain the preferred route, b t t b le t ca ital markets co ld ill e ai efe ed o te but turbulent capital a kets could result in a small decline in PE backed IPOs; PEs will increasingly look to trade sales or secondaries for an exit and we think that activity in this area could increase in double digits despite a generally unfavorable exit environmentPwC 15
  16. 16. Outlook: Growth in China related M&A is anticipated tocontinue (3/3)Strategic• Domestic M&A activity will continue to grow at a steady pace as Chinas industries and corporates consolidate and mature• Some foreign buyers may wait until disruptions in their home markets subside, but g y y p others may see an opportunity to deploy cash piles or to build further market share on top of existing China operations and we do not expect overall activity to decline sharplyPwC 16
  17. 17. Key messages• Overall China M&A activity in 2011 was up 5% compared to the previous year to 5 364 transactions – the highest annual total ever year, 5,364• China Outbound continued its inexorable rise climbing to a new record of 207 deals (up by 10%) worth US$42.9bn (up by 12%)• 2011 was a record year f Private Equity, with 437 l d for i i ih larger sized d l i d deals (defined as greater than US$10mn) up by 18%, valued at US$31.2bn up by 33%)• D Domestic strategic M&A powered ahead by 11% with 3,262 d l ti t t i d h db % ith 6 deals• But foreign strategic buyers pulled in their horns, falling by 11% to 482 transactions due to fewer deals done in the second half of 2011• We expect these trends to continue into 2012, despite challenging global economic conditionsPwC 17
  18. 18. Data compilation methodology p gyPwC
  19. 19. Key messages- disclaimerStatistics contained in this presentation and the press release may vary from those contained in previouspress releases There are three reasons for this: ThomsonReuters and ChinaVenture historical data is releases.constantly updated as deals are confirmed or disclosed; PricewaterhouseCoopers has excluded certaintransactions which are more in the nature of internal reorganisations than transfers of control; andPricewaterhouseCoopers has used different data vendors in the past. Included Deals Excluded Deals • Acquisitions of private/public companies resulting in change of • Property/real estate for individual properties control • Failed transactions • Investments in private/public companies (involving at least 5% • Options granted to acquire an additional stake when not 100% ownership) of the shares has been acquired • Mergers • Any purchase of brand rights • Buyouts/buyins (LBOs, MBOs, MBIs) • Land acquisitions • Privatisations • Equity placements in funds • Tender offers • Stake purchases by mutual funds • Spinoffs • Open market share buyback/retirement of stock unless part of • Splitoff of a wholly-owned subsidiary when 100% a privatisation sold via IPO • Balance sheet restructuring or internal restructuring • Divestment of company, division or trading assets resulting in • Investments in greenfield operations change of control at parent level • Going private transactions • Reverse takeovers • Re-capitalisation • Joint Venture buyouts • Joint Ventures • Receivership or bankruptcy sales/auctions • Tracking stockPwC 19
  20. 20. © 2012 PricewaterhouseCoopers Limited. All rights reserved. “PwC” refers to PricewaterhouseCoopersLimited or, as the context requires, the PwC global network or other member firms of the network, eachof which is a separate legal entity.

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