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Mainland financial firms open to M&As

FINANCIAL institutions on the Chinese mainland are among the most likely to make an acquisition in Asia Pacific next year, a survey said yesterday.

PricewaterhouseCoopers surveyed 215 senior executives of financial firms in January and February and found that Asia Pacific financial institutions are more optimistic about mergers and acquisitions than a year ago, with 42 percent expecting to make an acquisition in the next year. The figure on the mainland is 68 percent, followed by Taiwan with a 70-percent intention, according to the survey.

"The more active stance in China may be the result of comparatively stronger bank balance sheets and lower levels of outbound M&A activities in recent years," said Nelson Lou, a PwC partner, yesterday.

Although mainland financial firms are showing clear M&A intentions, they are still very cautious when it comes to actually making such moves, the survey found.

A reason for this caution is the difficulty of valuing assets which is the biggest concern. It takes about half a year for due diligence when a decision is made to acquire and another six months to realize the deal. Mainland respondents are the most optimistic, with half of them expecting the market to bottom out in six months.

The rejection over Coca-Cola's acquisition of China Huiyuan Juice Group won't deter takeover attempts from overseas financial firms on the mainland, said Lou.


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