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M&A deals in China decline by 20% in July
By Lydia Chen |
August 4, 2011, Thursday
|
Online Edition
Online Edition
CHINA'S merge and acquisition market shrank in July in both volumes of deals and investment, China Venture said today.
A total of 148 M&A deals were made public last month, a 20.43 percent drop from June's 186 but their total investment dipped slightly to 49.92 billion yuan (US$7.75 billion) from 50 billion yuan in June, the company said in a report.
More than 90.5 percent, or 134 of these deals, occurred between Chinese firms, involving 37.33 billion yuan of the total transaction value.
Developers had the most M&A deals last month as some small firms buckled under the pressure of liquidity shortage and had to accept acquisition offers by big rivals after the government took tough measures to hammer down property prices.
The real estate industry saw 17 M&A deals in July, totaling 11.88 billion yuan. It was followed by the transportation and energy industries.
Meanwhile, China is considering to offer tax incentives to venture capital firms to encourage them to invest in small and medium-sized firms, which are struggling for cash amid the government's credit-tightening.
The State Administration of Taxation is reassessing its incentive policies and might increase the amount of tax reductions, the China Securities Journal cited unnamed sources as saying today.
Venture capital firms already enjoy tax deductions of 70 percent of their investment in unlisted hi-tech SMEs under the current policy.
But with the new policy, VC investors could also enjoy tax reduction if they put money in non hi-tech and unlisted SMEs, the journal said.
The proposal is part of a raft of efforts China has launched to help SMEs get easier access to financing in addition to encouraging banks to squeeze more loans to small firms.
Some SMEs are struggling to survive after a series of interest rate hikes and credit restrictions as the government is battling a high inflation, according to a report released by Peking University researchers last month.
A total of 148 M&A deals were made public last month, a 20.43 percent drop from June's 186 but their total investment dipped slightly to 49.92 billion yuan (US$7.75 billion) from 50 billion yuan in June, the company said in a report.
More than 90.5 percent, or 134 of these deals, occurred between Chinese firms, involving 37.33 billion yuan of the total transaction value.
Developers had the most M&A deals last month as some small firms buckled under the pressure of liquidity shortage and had to accept acquisition offers by big rivals after the government took tough measures to hammer down property prices.
The real estate industry saw 17 M&A deals in July, totaling 11.88 billion yuan. It was followed by the transportation and energy industries.
Meanwhile, China is considering to offer tax incentives to venture capital firms to encourage them to invest in small and medium-sized firms, which are struggling for cash amid the government's credit-tightening.
The State Administration of Taxation is reassessing its incentive policies and might increase the amount of tax reductions, the China Securities Journal cited unnamed sources as saying today.
Venture capital firms already enjoy tax deductions of 70 percent of their investment in unlisted hi-tech SMEs under the current policy.
But with the new policy, VC investors could also enjoy tax reduction if they put money in non hi-tech and unlisted SMEs, the journal said.
The proposal is part of a raft of efforts China has launched to help SMEs get easier access to financing in addition to encouraging banks to squeeze more loans to small firms.
Some SMEs are struggling to survive after a series of interest rate hikes and credit restrictions as the government is battling a high inflation, according to a report released by Peking University researchers last month.
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