So far this year, the scale of overseas mergers and acquisitions by Chinese companies has totaled 52.2 billion U.S. dollars. Although it is still lower than last year's 62.1 billion U.S. dollars, it has far exceeded the scale of the 40.7 billion U.S. dollar M&A transactions of Japanese companies this year.
According to statistics, this year China will become the country with the largest total mergers and acquisitions in Asia, surpassing Japan, which has occupied the top spot for the first time in two years, and the field of M&A is not limited to natural resources and extends to industries such as food and banking.
Not only that, some investment bankers also expect large Chinese companies to step up mergers and acquisitions next year because they need to find new sources of revenue growth, and more global brands must open up markets.
M&A in Chinese companies still focuses on energy and electricity, but the share of these industries has decreased, from 52.3% five years ago to 44.1%.
In 2013, China's steel industry was mired in a quagmire, struggling in a downward trend of the economy and resulting in a large-scale and systematic loss of the entire industry. In the industry, the conflict between supply and demand has been escalating, steel mills have high stocks, and the capital chain has been broken. This has forced many steel mills and steel trading companies to stop production, transition, go out of business, or even go bankrupt. It can be said that they have entered the most difficult "winter" of the steel industry. But there is a turning point in any desperation, and we should do the best preparations at the worst - to vigorously promote the pace of mergers and acquisitions in the Chinese steel industry.
In the world, the global steel industry has experienced a total of 4 wave of mergers and acquisitions, which has largely saved the traditional manufacturing industry and continued the life of the industry. In the late 19th and early 20th centuries, financial giant JoPo Morgan swallowed 785 small and medium-sized steel plants and merged them with American steel companies, creating the world’s first super-large-scale company with assets exceeding US$1 billion. Seventy percent of the U.S. steel industry output started the first large-scale industrial consolidation in the world.
In the 1970s, the world’s sixth-best and No. 10 Fuji Steel Corporation merged to form Nippon Steel Corporation. Its steel output reached 32.95 million tons, ranking the top of the world at that time, which declared the golden age of the Japanese steel industry. Came. In the 1990s, the wave of mergers and acquisitions in the European steel industry formed the Arbed Group in Luxembourg, the Usinor Group in France, the Corus Group in the United Kingdom, Thyssen-Krupp in Germany, the RIVA Group in Italy, and the LMN (Ispat) Group in the United Kingdom. Big Steel Group.
At this point, the European steel industry has reached a peak, and six seats in the top ten steel mills in the world are also the real cross-border boundaries for the steel M&A industry and the transition to full internationalization. At the beginning of this century, France’s Zinole, Luxembourg’s Albeid and Arceleria of Spain jointly formed Arcelor and its steel production capacity reached 46 million tons, making it the world’s largest steel company and forming its fourth wave. After these four wave of mergers and acquisitions, the global steel industry in Europe and the United States continues to integrate technology and channels, and the improvement of financing models has deepened the development of the overall industry chain.
In contrast, in China, the merger and reorganization of China's steel industry can be roughly divided into three stages: 1997-1999, which is the merger and reorganization between state-owned enterprises led by the government, mainly for the reorganization of enterprises in the province, and inter-provincial reorganization. The reorganization method is Adjustment of asset allocation among state-owned or local state-owned enterprises; from July 2000 to July 2005, the merger and reorganization of the steel industry at this stage was dominated by the government, and Hong Kong capital and private enterprises began to participate, but this period of restructuring was not enough. Due to the increase in the number of steel enterprises, the rapid growth of steel production, the industry concentration has decreased; from 2006 to the end of the 2005 steel industry policy, the industry mergers and acquisitions reorganization accelerated, the government guidance and market integration at this stage, state-owned enterprises, private enterprises, foreign companies are actively involved, In addition to the reorganization of state-owned enterprises in the province and in the region, there are cross-regional, cross-industry, cross-border, cross-ownership joint, mergers and acquisitions and restructurings, both horizontal and vertical mergers and acquisitions. Mergers and reorganizations have evolved from gratuitous allocations to the transfer of shares and the acquisition of equity through the capital market.
At present, we are going through the third stage of the deepwater area. In Sham Shui Po District, the spontaneous acquisition of private enterprises is particularly important. In the “12th Five-Year Development Plan for Iron and Steel Industry,†it is proposed that the number of steel companies be substantially reduced, and that there are six to seven enterprise groups with strong market competitiveness. Therefore, private steel enterprises that occupy half of China's steel industry can only survive through mergers and acquisitions, and eventually integrate into a large-scale steel group with reasonable layout, advanced technology, and capacity of over 10 million tons. From the reform policy of the steel industry to deepen the investment system, the Third Plenary Session also put forward requirements to establish the main corporate investment status, mainly emphasizing that the occurrence of corporate investment behavior will mainly proceed from the company's operating capabilities, based on market demand, thereby weakening the government-led effect. In the case of mergers and acquisitions of steel companies, the government’s fully-dominant mergers and acquisitions may be relatively reduced. The government’s role in mergers and acquisitions of steel companies may gradually diminish, and private-owned mergers and acquisitions will also become a major trend.
From the point of view of the financial industry, taking banks as an example, in the past, simple indirect financing methods for lending to steel companies could easily lead to an increase in batch-rate and regional non-performing rates, prompting a significant rise in bank risks. As long as the financing strategy is changed, from a single capital provider to assisting the industry in risk pre-judgment in the economic downturn, the virtual economy is maximized through comprehensive financial services, from the development of the company’s single fund requirements to the integration of the entire industry. Participate in the real economy.
In recent years, international capital, especially Arcelor-Mittal, has been trying to enter China's steel industry from various channels, and China is also constantly countering foreign investment in controlling domestic pillar industries and cooperation with foreign capital to obtain advanced technology. This is a long-term game process.
According to statistics, this year China will become the country with the largest total mergers and acquisitions in Asia, surpassing Japan, which has occupied the top spot for the first time in two years, and the field of M&A is not limited to natural resources and extends to industries such as food and banking.
Not only that, some investment bankers also expect large Chinese companies to step up mergers and acquisitions next year because they need to find new sources of revenue growth, and more global brands must open up markets.
M&A in Chinese companies still focuses on energy and electricity, but the share of these industries has decreased, from 52.3% five years ago to 44.1%.
In 2013, China's steel industry was mired in a quagmire, struggling in a downward trend of the economy and resulting in a large-scale and systematic loss of the entire industry. In the industry, the conflict between supply and demand has been escalating, steel mills have high stocks, and the capital chain has been broken. This has forced many steel mills and steel trading companies to stop production, transition, go out of business, or even go bankrupt. It can be said that they have entered the most difficult "winter" of the steel industry. But there is a turning point in any desperation, and we should do the best preparations at the worst - to vigorously promote the pace of mergers and acquisitions in the Chinese steel industry.
In the world, the global steel industry has experienced a total of 4 wave of mergers and acquisitions, which has largely saved the traditional manufacturing industry and continued the life of the industry. In the late 19th and early 20th centuries, financial giant JoPo Morgan swallowed 785 small and medium-sized steel plants and merged them with American steel companies, creating the world’s first super-large-scale company with assets exceeding US$1 billion. Seventy percent of the U.S. steel industry output started the first large-scale industrial consolidation in the world.
In the 1970s, the world’s sixth-best and No. 10 Fuji Steel Corporation merged to form Nippon Steel Corporation. Its steel output reached 32.95 million tons, ranking the top of the world at that time, which declared the golden age of the Japanese steel industry. Came. In the 1990s, the wave of mergers and acquisitions in the European steel industry formed the Arbed Group in Luxembourg, the Usinor Group in France, the Corus Group in the United Kingdom, Thyssen-Krupp in Germany, the RIVA Group in Italy, and the LMN (Ispat) Group in the United Kingdom. Big Steel Group.
At this point, the European steel industry has reached a peak, and six seats in the top ten steel mills in the world are also the real cross-border boundaries for the steel M&A industry and the transition to full internationalization. At the beginning of this century, France’s Zinole, Luxembourg’s Albeid and Arceleria of Spain jointly formed Arcelor and its steel production capacity reached 46 million tons, making it the world’s largest steel company and forming its fourth wave. After these four wave of mergers and acquisitions, the global steel industry in Europe and the United States continues to integrate technology and channels, and the improvement of financing models has deepened the development of the overall industry chain.
In contrast, in China, the merger and reorganization of China's steel industry can be roughly divided into three stages: 1997-1999, which is the merger and reorganization between state-owned enterprises led by the government, mainly for the reorganization of enterprises in the province, and inter-provincial reorganization. The reorganization method is Adjustment of asset allocation among state-owned or local state-owned enterprises; from July 2000 to July 2005, the merger and reorganization of the steel industry at this stage was dominated by the government, and Hong Kong capital and private enterprises began to participate, but this period of restructuring was not enough. Due to the increase in the number of steel enterprises, the rapid growth of steel production, the industry concentration has decreased; from 2006 to the end of the 2005 steel industry policy, the industry mergers and acquisitions reorganization accelerated, the government guidance and market integration at this stage, state-owned enterprises, private enterprises, foreign companies are actively involved, In addition to the reorganization of state-owned enterprises in the province and in the region, there are cross-regional, cross-industry, cross-border, cross-ownership joint, mergers and acquisitions and restructurings, both horizontal and vertical mergers and acquisitions. Mergers and reorganizations have evolved from gratuitous allocations to the transfer of shares and the acquisition of equity through the capital market.
At present, we are going through the third stage of the deepwater area. In Sham Shui Po District, the spontaneous acquisition of private enterprises is particularly important. In the “12th Five-Year Development Plan for Iron and Steel Industry,†it is proposed that the number of steel companies be substantially reduced, and that there are six to seven enterprise groups with strong market competitiveness. Therefore, private steel enterprises that occupy half of China's steel industry can only survive through mergers and acquisitions, and eventually integrate into a large-scale steel group with reasonable layout, advanced technology, and capacity of over 10 million tons. From the reform policy of the steel industry to deepen the investment system, the Third Plenary Session also put forward requirements to establish the main corporate investment status, mainly emphasizing that the occurrence of corporate investment behavior will mainly proceed from the company's operating capabilities, based on market demand, thereby weakening the government-led effect. In the case of mergers and acquisitions of steel companies, the government’s fully-dominant mergers and acquisitions may be relatively reduced. The government’s role in mergers and acquisitions of steel companies may gradually diminish, and private-owned mergers and acquisitions will also become a major trend.
From the point of view of the financial industry, taking banks as an example, in the past, simple indirect financing methods for lending to steel companies could easily lead to an increase in batch-rate and regional non-performing rates, prompting a significant rise in bank risks. As long as the financing strategy is changed, from a single capital provider to assisting the industry in risk pre-judgment in the economic downturn, the virtual economy is maximized through comprehensive financial services, from the development of the company’s single fund requirements to the integration of the entire industry. Participate in the real economy.
In recent years, international capital, especially Arcelor-Mittal, has been trying to enter China's steel industry from various channels, and China is also constantly countering foreign investment in controlling domestic pillar industries and cooperation with foreign capital to obtain advanced technology. This is a long-term game process.
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