Related News
Risks rise with more Chinese overseas purchase
Online Edition
As Chinese companies increasingly turn to outbound acquisitions for resources, technologies and new markets, there are risks such as regulatory uncertainties and asset bubbles that may hinder the momentum, industry insiders said.
Chinese bidders have been buying up foreign companies at a startling rate, with the total value of outbound mergers and acquisitions announced in the first quarter reaching US$113 billion, almost breaking the US$121 billion for the whole year of 2015, Bloomberg data showed.
“Despite of the robust growth, only 8.5 percent of Chinese assets are allocated in overseas markets, much lower than that of advanced countries, which allocate around 40 percent of their assets overseas,” said Wang Yunfan, chief executive officer of Morning Whistle Group, a cross-border M&A information provider.
It’s urgent for China to upgrade its role in global value chain through strategic investment worldwide, but it’s equally important to learn lesson from mistakes and manage potential risks, Want said at the 3rd Cross-border Investment and M&A Summit yesterday.
With the rise of Chinese buyers, there have been concerns that China is repeating a Japanese style boom and bust. Japanese multinationals were snapping up overseas assets in 1980s but later saw their asset value evaporate as asset bubbles burst in the 1990s.
To avoid similar failures, Chinese buyer should be vigilant against policy uncertainties, place priority on cash flows and be aware of potential asset bubbles in sectors such as telecommunications, media, and technology (TMT), finance and real estate, Wang noted.
Wang Yang, chairman of Cybernaut Investment Group, told the summit: ““The lack of enough attention on talents and culture of targeted companies has led to the failure of some mega mergers and acquisitions.”
Liao Feng, president of China Minsheng Investment Corp, one of China’s largest private investment funds, shared the view, saying that real challenges lie in post-merger integrations at management level as well as fusion of organizational culture.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
