China M&As Dominant, But Difficult
June 02, 2007 | BY
clpstaff &clp articles &Merger and acquisition in China is expected to remain regionally most active yet challenging in 2007.
A report released by international law firm Norton Rose has shown that China is expected to be Asia's largest destination for inbound merger and acquisition (M&A) activity in 2007. However, China will remain one of the most challenging jurisdictions in which to conduct M&A transactions.
The report, Cross-border M&A, The Asian Perspective, predicts continued growth in M&A activity in the region. In 2006, there were more than 2,073 cross-border deals, valued at US$52.4 billion, in Asia. Financial services and telecommunications remain the most active sectors.
China leads the field in M&A, with 92% of companies expecting to look at such a deal in the next 12 months. Although it is expected to be the most active market in terms of M&A, China was ranked the most difficult in which to operate. The report says that 25% of respondents (including 31% of respondents in China) chose it as the most challenging among Asian markets.
"It may seem counter-intuitive for two of Asia's most regulated industries to attract so much cross-border M&A activity," says David Stannard, Norton Rose's managing partner for Asia, "but the willingness of companies to buy into these sectors despite foreign-ownership restrictions indicates their faith in the growth of Asia's economies
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