27 Jan 2020
The Chinese “spring festival” comes early this year, when spring still seems a long time away. After Shanghai’s thrilling Western-New-Year-adjacent fireworks-with-drones display, we look forward this week to what will be even more thrilling celebrations. That spectacle shows how China is assuming a role at the forefront of technological innovation as we are also seeing in sectors and M&A, with China taking the lead in fintech, for example.
It has not been an easy year for China with increased geopolitical tensions between the US and China and more than six months of protests in Hong Kong. Now the world is looking to the Chinese response to the coronavirus. China mainland and Hong Kong, together the largest contributor to M&A activity in Asia, experienced a year-on-year decline of 27.7% in deal value. Volume declined 17.2% year-on-year to 1,735 transactions in 2019, drawing down its global M&A market share from 11.4% in 2018 to 8.8%, according to Mergermarket.
However, after two years of threats of trade war, China and the US continued to be each other’s largest foreign investors in 2019. Looking into 2020, the market development seems to be positive given the successful signing of the “Phase One” agreement between the US and China in this Janauary. In addition, China is boosting its domestic economy to withstand the negative effects of geopolitical uncertainty. The government has relaxed the profitability requirement in M&A deals involving listed companies and released policies such as the “Catalogue of Industries for Encouraging Foreign Investment (2019 Version)” to increase market access for foreign investors. Meanwhile the mixed-ownership reform aimed at reshaping its state-owned enterprises (SOEs) has already been extended not only to traditional industrial sectors such as coal and electricity, steel and non-ferrous metal, but also to sectors such as financial services, infrastructure, civil aviation, and telecom. Furthermore, the Chinese government emphasized in the meeting hosted in late December 2019 that SOEs are strongly encouraged to develop sectors such as advanced manufacturing and technology, which has contributed on average to 1% of GDP growth in the recent years.
Worldwide deal volume also dropped in 2019. Even so, Clairfield International ranked in the top 10 of advisory firms in Europe according to the league table rankings compiled by Refinitiv. Clairfield in Mexico ranked number one and Clairfield’s French, German, Nordic, and Eastern European teams also ranked in the top ten while all our other worldwide locations achieved notable rankings in the top 20. Notable transactions closed in 2019 include many crossborder deals, including several including Chinese buyers.
- Clairfield advised Vossloh AG in the pending sale of its locomotives business unit to CRRC Zhuzhou Locomotive Co., Ltd., Zhuzhou, China (CRRC ZELC), a subsidiary of the China Railway Rolling Stock Corporation Ltd. (CRRC). CRRC is the largest rolling stock manufacturer in the world. Clairfield ran a limited global auction through its local offices granting direct C-level access to all relevant players from the industry.
- Clairfield为福斯罗（Vossloh AG）的机车业务出售给中车股份有限公司（CRRC）的子公司中国中车株洲株洲机车有限公司（CRRC ZELC）提供咨询服务。中国中车是世界上最大的机车车辆制造商。Clairfield通过其各当地团队进行了有限的全球拍卖，并提供让该行业的相关企业直接与高管层对话的机会。
- Clairfield also advised on the merger of ASI Logistics, a Chinese-owned logistics company, with Sedis Logistics, the Dutch subsidiary of the LLOGS Group. The ASI Group mandated Clairfield International in 2018 to find a strategic partner, complementary to its ASI Logistics subsidiary, and able to accelerate its development. The transaction was completed with the help of transport & logistics specialists from Clairfield International’s services group, who identified merger partners from eight different countries.
- Clairfield还为中国控股的物流公司ASI Logistics与LLOGS 集团的荷兰子公司Sedis Logistics的合并提供咨询服务。 ASI集团于2018年委托Clairfield International寻找与其ASI Logistics子公司能形成战略互补并能够加速其发展的合作伙伴。交易是在Clairfield International服务行业小组的运输和物流专家的帮助下完成的，他们提供了来自八个不同国家的潜在合并伙伴。
2020 is the Year of the Rat, the first animal in the Chinese zodiac. The Chinese word for “rat”, shu鼠, is pronounced the same as the word for “to count”, associating the Year of the Rat with accounting and therefore money. As Chinese well-wishers traditionally say, “This year I hope you have a lot of money to count.”