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Mainland most likely for M&As
By Zhang Fengming |
March 23, 2009, Monday
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Online Edition
Online Edition
CHINESE mainland's financial institutions are among the most likely to make an acquisition in Asia Pacific next year, according to a PricewaterhouseCoopers survey today.
PricewaterhouseCoopers surveyed 215 senior executives from financial firms in January and February and found surprisingly that Asia Pacific financial institutions were more optimistic about mergers and acquisitions than a year ago, with 42 percent expecting to make an acquisition in the next year. The mainland figure was 68 percent, followed by Taiwan with a 70 percent expectation.
"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 PricewaterhouseCoopers partner, today.
Mainland financial players are showing interest in M&A but are still very cautious on actually carrying out the deals, the survey said.
The difficulty in valuing assets is the biggest concern.
It takes about half a year to carry out due diligence on an acquisition and another half a year to realize the deal. That's why acquisition attempts may occur ahead of the economic curve. Mainland respondents are the most optimistic, with half of them expecting the market to bottom out in six months.
The rejection of Coca-Cola's acquisition of China Huiyuan Juice Group will not deter takeover attempts from overseas players in the finance industry in the mainland, said Lou.
Coca-Cola's acquisition on Huiyuan was rejected because of monopoly concerns and it is not the same case for the finance industry as overseas financial players don't have a dominant say, Lou said.
PricewaterhouseCoopers surveyed 215 senior executives from financial firms in January and February and found surprisingly that Asia Pacific financial institutions were more optimistic about mergers and acquisitions than a year ago, with 42 percent expecting to make an acquisition in the next year. The mainland figure was 68 percent, followed by Taiwan with a 70 percent expectation.
"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 PricewaterhouseCoopers partner, today.
Mainland financial players are showing interest in M&A but are still very cautious on actually carrying out the deals, the survey said.
The difficulty in valuing assets is the biggest concern.
It takes about half a year to carry out due diligence on an acquisition and another half a year to realize the deal. That's why acquisition attempts may occur ahead of the economic curve. Mainland respondents are the most optimistic, with half of them expecting the market to bottom out in six months.
The rejection of Coca-Cola's acquisition of China Huiyuan Juice Group will not deter takeover attempts from overseas players in the finance industry in the mainland, said Lou.
Coca-Cola's acquisition on Huiyuan was rejected because of monopoly concerns and it is not the same case for the finance industry as overseas financial players don't have a dominant say, Lou said.
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