Merger and acquisition cluster aimed at industrial restructuring
Print Edition
PUTUO District has launched a key economic project — the “Shanghai Putuo Merger and Acquisition Financial Cluster” — considered a pioneer in China for M&A finance.
Plans call for the cluster to become a center for market advancement in merger and acquisition, with the long-term goal of promoting industrial reconstructing and a mixed ownership economy and becoming an important trade platform for international M&A by the year 2020.
The district also released the first M&A index report in Putuo.
Nesting zone
This nesting zone will be based in the current Changfeng Ecological Business District with the Changfeng Finance Port as the core. Since it opened in 2010, the Changfeng Finance Port has gathered 103 investment and management companies and raised 30 billion yuan (US$4.8 billion). It has become a leader in private equity investment fund in the west of Shanghai.
As the Shanghai United Assets and Equity Exchange (SUAEE) will be relocated to the M&A cluster zone, other investment and management companies in the district will join the property rights trading platform.
Cai Minyong, CEO of SUAEE, is confident about the future of the M&A cluster zone.
“Besides the stock market, about 70 percent of companies that went through merger and acquisition did so in Shanghai,” he said. “Now 50 percent of state-owned enterprises also complete their equity transaction at SUAEE.”
Putuo has a clear plan that the M&A cluster zone will become an important addition to Shanghai being an international finance center.
“As far as I know, Putuo is the first district in the country to bring up merger and acquisition as a key task. It’s a big thing for the capital market,” said Wang Wei, president of the China Mergers & Acquisitions Association.
Now most equity firms in Changfeng are facing a transformation. For many private equity firms, an IPO is not a strong exit option, while the merger and acquisition financial institutions will break the bottleneck situation many of them face.
Business magnet
Firms like China Southern Asset Management and Guosheng Group have expressed their intentions to enter the cluster zone.
Putuo has more than 20,000 companies of all size, including over 1,000 technology enterprises. Promoting intensive and scale operation has always been a challenge for the district.
Through developing M&A finance, Putuo will achieve interactive development of the companies. Companies will be encouraged to realize market M&A and independently adjust and upgrade productivity and optimize their systems according to the market.
Together with SUAEE, a “Shanghai Putuo M&A Index” will be released regularly to reflect the market operation and provide investment guidance.
A special fund will be established to support new institutions in organization cost, office space, business development and talent introduction. Putuo will also co-establish an M&A research center and emphasize nurturing talents in the field.
The cluster zone as an “upgrade” for Changfeng Financial Port is planned to cover three square kilometers. There will be 20 office buildings, and 40,000 square meters will be used for merger and acquisition.
The district will also introduce M&A financial institutions, professional agencies and influential industry associations, research institutions and high-end forums. The business hub will be equipped with convenient transportation, support facilities and ecological environment.
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