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China Global M&A Push, 2005 ~ Nowadays

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China’s Investors Target Brazil in Hunt for Growth
Beijing’s shift from pure resources sparks $11.9bn of deals spanning food to tech

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Monashees put Brazilian tech on Beijing’s map when it sold a local daily deal site,
Peixe Urbano, to Chinese internet giant Baidu in 2014​

Yesterday by: Lucy Hornby in Beijing and Joe Leahy in São Paulo

Every year, Brazilian venture capital firm Monashees takes entrepreneurs from its portfolio companies on an overseas discovery tour. This year, instead of Silicon Valley, the firm headed to the Yangtze Valley, in a clear sign of a new front opening for Chinese investment in Latin America.

China is seeking to expand lending and investment in Brazil and elsewhere on the continent, as it shifts from its traditional resource focus to manufacturing, logistics and even technology. The switch comes amid a prolonged slump in energy prices and an economic meltdown in Venezuela, which had dominated China’s push into the region.

China is turning into an international financial investor, looking elsewhere for returns on investment as profit margins at home turn thin. That means considering a broader range of industries than it has been targeting.

Mergers and acquisitions tell part of the story. So far in 2016, Chinese companies have spent $11.9bn acquiring Brazilian counterparts, the highest since 2010, when Brazil was at the height of its commodity-driven economic boom, according to figures from Dealogic, the data company. Deals this year have been concentrated in utilities but span sectors ranging from food and beverage to transport.

Monashees put Brazilian tech on Beijing’s map when it sold a local daily deal site, Peixe Urbano, to Chinese internet giant Baidu in 2014 for an undisclosed amount. In leading a group of 60 entrepreneurs to China, Monashees is hoping to replicate that success.

The Brazilian group met all the biggest Chinese tech companies, from Baidu to Alibaba and Tencent, focusing on areas such as software as a service, fintech, e-health and education, said co-founder Eric Acher. The group started 10 years ago and invests in Argentina, Colombia and Silicon Valley, in addition to its main focus, Brazil.

China’s recent advances in innovation and technology were more tangible for Brazilian entrepreneurs, Mr Acher said: “We can learn a lot from what happened in the last 15 years in China as an emerging market, the second-largest tech ecosystem in the world today.”

Beijing’s shift away from pure resources is important to maintaining investment flows into Latin America. In the downturn since 2012, World Bank lending to the region halved, Inter-American Development Bank lending stayed roughly even but Chinese lending soared, according to data from the OECD.

“China is acting as the countercyclical lender, the stabiliser,” says Angel Melguizo, head of the Latin American and Caribbean development centre under the OECD.​

Much of that money has flowed into Brazilian energy and infrastructure. But while earlier investment was into state-controlled infrastructure, replicating the Chinese model, new flows are “basically market investments”, said Marcos Caramuru de Paiva, Brazil’s ambassador in Beijing. “It’s very much a demonstration of how dynamic the relations are.”​

China and Brazil are finalising details of a $20bn Sino-Brazilian bilateral investment fund, first announced last year, to which China will contribute $15bn. The new fund falls under the umbrella of the China-Latin America Industrial Cooperation Investment Fund (CLAI), adding to its existing $30bn investment mandate.

Han Deping, president of the CLAI fund, said future targets include renewable energy such as solar power; logistics and high-end manufacturing. “Latin America wants to move away from commodity exports, get into value-added processing,” he said.​

Brazilian companies have had far less success in China, with mining giant Vale repeatedly rebuffed in attempts to invest on the Chinese mainland even at the height of China’s hunger for iron ore. Monashees hopes to overcome that with an investment of its own into China, even as it seeks to attract Chinese money to its Latin American portfolio.

Another Brazilian firm to target China’s relatively closed market is BRF Global, the world’s largest poultry supplier, which is setting up poultry operations in Southeast Asia with an eye to ultimately bringing its integrated supply chain into the mainland. It already exports chicken parts, pork and beef to China.

“That’s why we are interesting. We’re trying to go in the opposite direction,” says Marcos Sawaya Jank, BRF Global’s vice-president of business development for Asia.​


https://www.ft.com/content/01972f58-ae62-11e6-a37c-f4a01f1b0fa1
 
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ZTE set to buy 48% of Turkey's Netas
Xinhua, December 7, 2016

China's ZTE has agreed to buy 48.04 percent of Turkish systems integration provider Netas for 358 million Turkish lira (US$101.3 million), Netas said on its website yesterday.

This transaction remains subject to the Turkish Competition Authority's approval.

ZTE, the Chinese telecom equipment giant, will become the largest shareholder of Netas after the transaction is completed.

"The transaction will equip Netas with additional technologies to provide more services and solutions to its customers and to expand its geographic reach," Netas said in a statement.

"This transaction reinforces the company's solid corporate structure, and will accelerate its focus on R&D, innovation and best of breed next-generation technology know-how," it added.

"With our new shareholder, we will continue to flourish and position Netas as a global technology player," said Mujdat Altay, chief executive officer of Netas.

David Walsh, current chairman of Netas, welcomed ZTE's investment, citing that with the Chinese company's investment, global reach and product depth, Netas is extremely well positioned for future success.

Netas provides technology consultancy and post-sales assistance for telecom operators, public and private enterprises in Turkey and the world.
 
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China's biggest meat processor completes deal with New Zealand's biggest meat cooperative
Source: Xinhua 2016-12-06 17:27:41

WELLINGTON, Dec. 6 (Xinhua) -- China's biggest meat processor completed a deal Tuesday to buy a half stake of New Zealand's biggest meat cooperative.

The deal sees Shanghai Maling take a 50-percent interest in Silver Fern Farms (SFF) at a price of 267 million NZ dollars (190.58 million U.S. dollars).

The completion of the deal would be welcome news to shareholders and suppliers, SFF chair Rob Hewett said in a statement.

"This partnership is a genuine game-changer for Silver Fern Farms. It delivers a strong and sustainable capital structure, the resources to accelerate our plate to pasture strategy in selected global markets and the capital to invest in optimizing our production facilities and capability," said Hewett.

"Importantly, it brings a collaborative and connected partner in the fastest growing red meat market in the world, China."

SFF and Shanghai Maling also announced an appointment of five directors each including two New Zealand resident directors by Shanghai Maling to the board of Silver Fern Farms.

Minister for Land Information Louise Upston and Associate Minister for Finance Paula Bennett gave final approval of the deal in September, following a recommendation from the government's Overseas Investment Office (OIO).

The OIO assessed Shanghai Maling's purchase application as it was an overseas investment in "sensitive land and significant business assets."

The OIO said SFF, the largest livestock processing and marketing entity in New Zealand, owned around 1,769 hectares of sensitive land.

However, an OIO report said it was operationally constrained by a high level of debt.

Shanghai Maling would help SFF gain a greater presence in China through assistance with product development, market research, government approvals and access to e-commerce sites and 2,000 retail stores over a period of three years.

Silver Fern Farms, a farmer-controlled cooperative with more than 6,200 ordinary shareholders and more than 16,000 farmer partners, operates 18 processing facilities throughout the country, employing more than 7,000 staff.

Shanghai Maling, a subsidiary of the Bright Food Group, is a leading Chinese food manufacturer, processor and distributor with direct control of 800 supermarkets and retail stores.

The deal has been beset by controversy with a small group of SFF shareholders staging a revolt and demanding a new vote after claiming the board and executives misled them on its debt levels.

In October 2015, SFF shareholders voted 82.22 percent in favor of the deal and a second vote in August saw it passed by 80.4 percent.

The Financial Markets Authority, the market watchdog, in May cleared the board of issuing misleading or deceptive documents.
 
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China closely monitoring 'irrational' outbound investments
Xinhua, December 7, 2016

Chinese regulators reiterated Tuesday that there is no change in government policies to encourage businesses to go global, but they are closely monitoring the tendency of "irrational" overseas investment in some areas.

Real estate, hotels, film, entertainment and sports clubs are among the industries singled out for a tendency for irrational overseas investment, according to a statement jointly released by the National Development and Reform Commission, Ministry of Commerce, the People's Bank of China and the State Administration of Foreign Exchange.

Regulators are also keeping an eye on risks associated with certain types of overseas activities, such as large non-core business investments and outbound investments in the form of limited partnership, and involved companies are advised to make their decisions "carefully," according to the statement.

The statement was in response to news that China will tighten regulations on outbound investments to slow capital outflows.

The government will continue to support capable and qualified businesses to carry out outbound investment activities in accordance with regulations, the statement stressed.

The principle in investment management policies has not changed, it said.

Outbound investment has grown quickly in recent years and played an important role in deepening mutually beneficial cooperation between China and other countries.

But with the yuan under depreciation pressure and the economy slowing, concerns about capital outflow have been on the rise.

Due to accelerated economic growth in the United States, Donald Trump's victory in the presidential election and stronger expectations of an interest rate hike by the Federal Reserve, the dollar has strengthened in value against most other major currencies since October.

Last month, the yuan has fallen 1.69 percent versus the dollar, but has been relatively stable against a basket of other currencies.

Latest data from the China Foreign Exchange Trade System showed the yuan appreciated slightly against a basket of currencies in November with mild fluctuations.

Chinese officials have repeatedly ruled out the possibility of sharp, sustained yuan depreciation against the dollar, citing the country's solid economic fundamentals, current account surplus and abundant forex reserves.

@Shotgunner51
 
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TaiShang said:
China closely monitoring 'irrational' outbound investments
Xinhua, December 7, 2016

Chinese regulators reiterated Tuesday that there is no change in government policies to encourage businesses to go global, but they are closely monitoring the tendency of "irrational" overseas investment in some areas.

Real estate, hotels, film, entertainment and sports clubs are among the industries singled out for a tendency for irrational overseas investment, according to a statement jointly released by the National Development and Reform Commission, Ministry of Commerce, the People's Bank of China and the State Administration of Foreign Exchange.

Regulators are also keeping an eye on risks associated with certain types of overseas activities, such as large non-core business investments and outbound investments in the form of limited partnership, and involved companies are advised to make their decisions "carefully," according to the statement.

The statement was in response to news that China will tighten regulations on outbound investments to slow capital outflows.

The government will continue to support capable and qualified businesses to carry out outbound investment activities in accordance with regulations, the statement stressed.

The principle in investment management policies has not changed, it said.

Outbound investment has grown quickly in recent years and played an important role in deepening mutually beneficial cooperation between China and other countries.

But with the yuan under depreciation pressure and the economy slowing, concerns about capital outflow have been on the rise.

Due to accelerated economic growth in the United States, Donald Trump's victory in the presidential election and stronger expectations of an interest rate hike by the Federal Reserve, the dollar has strengthened in value against most other major currencies since October.

Last month, the yuan has fallen 1.69 percent versus the dollar, but has been relatively stable against a basket of other currencies.

Latest data from the China Foreign Exchange Trade System showed the yuan appreciated slightly against a basket of currencies in November with mild fluctuations.

Chinese officials have repeatedly ruled out the possibility of sharp, sustained yuan depreciation against the dollar, citing the country's solid economic fundamentals, current account surplus and abundant forex reserves.

@Shotgunner51
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Compared to other old creditor nations, China is still a new guy in this sports of converting surplus cash/bonds/t-bills into direct equities, aka "direct investments". Yes, absolutely agree with discouraging "irrational" direct investments.
  • Real estate, hotels, film, entertainment, sports club ... these are usually low tech, labour intensive services in fully competitive markets. No strategic value in the long run, let alone game changer for an industry.
  • Many corporations diversify too much, too fast, into non-core businesses, end up dying young.
  • Going into limited partnerships (LP) without knowing what is investment is like sending sheep to the wolves aka general partners (GP).
  • Such "irrational" investments are led by Chinese POE or even HNWI (High Net-worth Individuals), typical case is Wanda Group's expansion into US cinema and film industry, European soccer clubs. As I have mentioned before, Sovereign Welfare Funds are mandated by the state to target strategic assets, they are best manned and equipped "PLA regulars in suits", it might be harsh to ask the same from POE but at least they should learn some financial basics 101, and combat skills that even the best SWF have yet to master.
 
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China makes first investment in Irish energy market
Geoff Percival
Thursday, December 08, 2016

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China has made its first investment in Ireland’s energy market, with the European arm of its state-owned nuclear development company China General Nuclear (CGN) agreeing to buy 14 wind farms from Irish renewable energy group Gaelectric.

CGN Europe is one of the major stakeholders in the UK’s controversial planned £18bn (€21bn) nuclear power plant at Hinkley Point in Somerset and is one of the leading nuclear, renewable and clean energy groups in the world, with $70bn (€65bn) worth of assets on its books and 35,000 employees.

Company heads were in Dublin, yesterday, to sign a deal to buy 230 megawatts of Irish wind energy assets owned by Gaelectric.

While no transaction fee has been disclosed, an estimate of between €1.3m and €1.5m per MW would suggest the deal is worth between €300m and €350m to Gaelectric.

The Irish firm will continue to manage the assets —which include seven wind farms in the Republic and seven in the North — on behalf of CGN. Of the 14 wind farm projects, 10 are currently operational, while the remaining four will be by the middle of next year. Gaelectric will remain an independent company and will still have more than 500MW worth of wind and solar-generated renewable power projects in the pipeline.

“This agreement allows us to support the group’s balance sheet, paying down debt and creating the foundations for our other operational and development interests in the renewable energy sector, including a near-term development pipeline across wind, solar, biomass and energy storage,” said chief executive Barry Gavin.​

At yesterday’s signing ceremony, CGN Europe chief executive Dr Wei LU said the company’s first asset purchases in Ireland will make “an important contribution” to its objective of becoming a global leader in clean energy, adding CGN was buying “a superb portfolio of operating wind energy assets”.

Deputy Finance Minister Eoghan Murphy said the deal will enhance Ireland’s energy sector, “through a considerable injection of technical expertise and economic strength”, and support job creation.


“[This] agreement between Gaelectric and CGN Europe Energy demonstrates the attractiveness of Ireland’s clean and sustainable energy credentials,” Mr Murphy added at the announcement.
​


http://www.irishexaminer.com/archiv...investment-in-irish-energy-market-434268.html
 
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Shotgunner51 said:
Ingram Micro snapped up for $6bn
Chinese conglomerate buys Ingram, will run it as a subsidiary

View attachment 358769

Chinese aviation and shipping conglomerate HNA Group has takeover Ingram Micro for about $6bn, and run as subsidiary of Tianjin Tianhai under HNA Group.

Details:
http://www.channelnomics.com/channelnomics-us/news/2447636/ingram-micro-snapped-up-for-usd6bn
http://www.channelnomics.com/channelnomics-us/news/3000790/ingrams-usd6-billion-takeover-finalized
http://thevarguy.com/information-te...cquisition-ingram-micro-closes-serves-microco
http://www.techwire.net/market-news/ingram-micros-6-billion-merger-closes.html
http://www.technologyintegrator.net/article/chinese-firm-to-buy-ingram-micro-for-6-billion-in-cash/
Click to expand...
Located in ontario Canada
 
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National Grid to sell 61% of gas business to Sino-Australian group
Deal values distribution division at £13.8bn including debt
Yesterday by: FT Reporters

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The UK government’s approach to foreign investment in critical infrastructure is to be tested after National Grid agreed to sell a controlling stake in its gas distribution division that serves nearly 11m British households and businesses.
  • In one of the biggest British infrastructure deals in recent history, the FTSE 100 company said on Thursday it had struck a deal to sell a 61 per cent stake in its UK gas distribution business to a consortium backed by China Investment Corporation, China’s sovereign wealth fund, and Macquarie, the Australian investment bank.
  • The terms of the transaction imply an enterprise value for the division of around £13.8bn including debt. The consortium will pay £3.6bn in cash for equity interest. National Grid will also receive £1.8bn in debt financing. Allianz Capital Partners, UK asset manager Hermes Investment Management and the Qatar Investment Authority (sovereign wealth fund of Qatar) are also part of the consortium, along with Amber Infrastructure and Dalmore Capital, two UK fund managers.
  • The deal marks the first big foreign investment in UK energy assets since the government announced a review of the rules governing the sale of “critical infrastructure” in September. This was seen as a signal that Theresa May, prime minister, would be more interventionist in such transactions than her predecessor, David Cameron.
  • China Investment Corporation (CIC) owns stakes in Thames Water and Heathrow airport.
  • Foreign investment in UK infrastructure has been in the spotlight since Mrs May ordered a review of the £18bn Hinkley Point nuclear power station over the summer in part because of security concerns about Chinese involvement. The project was eventually given the go-ahead but only after Downing Street promised that future foreign investment in critical infrastructure would be “scrutinised for the purposes of national security”.
  • National Grid said all parties were also interested in a “potential future sale” of an additional 14 per cent stake in the gas distribution business and “further details will be announced if agreement is reached”.
  • The deal is subject to approval from the European Commission and comes at a time of increased sensitivity to Chinese investment in western countries.
The sale of the stake in a business that serves about half of UK residences had attracted strong interest from Asian investors.
  • State-owned China Resources was part of a consortium that participated in the auction, alongside Australia’s Hastings Fund Management and Singapore Power.
  • National Grid’s gas distribution business, which serves homes in regions including London, the West Midlands and north-west England, produces reliable cash flows and generated £403m of operating profits in the first six months of this year. However, the assets produce lower returns than other parts of National Grid’s business, such its UK electricity transmission system and its power distribution network in the US north-east.
Reporting by Lauren Fedor and Jim Pickard in London, Yuan Yang in Beijing, Don Weinland in Hong Kong, and Andrew Ward in Singapore.

Read the full story at https://www.ft.com/content/6f421412-bd00-11e6-8b45-b8b81dd5d080?yptr=yahoo&ref=yfp
 
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Kidman sale finally gets green light
December 9, 2016 1.43pm AEDT

Author:
Michelle Grattan
Professorial Fellow, University of Canberra​

The sale of the vast Kidman pastoral empire to the joint venture Outback Beef – led by Gina Rinehart’s Hancock with the Chinese-owned Shanghai CRED having a one-third interest – has passed the foreign investment hurdle.

Treasurer Scott Morrison has approved the deal after he rejected earlier foreign-controlled bids on national interest grounds. The bids, in two tranches, included three that were totally or majority Chinese, and one European bid.

The joint venture’s final bid was A$386.5 million. It had been marginally upped after a group of Australian families put in a last-minute counter bid.

The huge Anna Creek station with an associated property, The Peake, is being carved out and acquired by the local Williams family, who have adjoining land. The Woomera defence area overlaps part of Anna Creek, and national security was one factor in Morrison’s initial rejection of a sale.

Morrison said his earlier security concerns had been mitigated by the excision of Anna Creek.

He said the sale actually lifts local ownership of the original land area from about two-thirds to nearly three-quarters. This is because of the Anna Creek sale to locals. Kidman has had a significant level of UK ownership. The A$386.5 million includes the proceeds from selling Anna Creek and The Peake.

Morrison said the Australian-owned Hancock would control the board, as well as the day-to-day operation of the business. Kidman would remain an Australian incorporated company headquartered in South Australia.

The new owner has promised significant investment in the business, planning to increase the cattle herd by 20,000 over the coming 18 months. It has said it will invest up to A$19 million in capital improvements to boost efficiency and carrying capacity, creating 35 new full-time permanent jobs while also employing new contractors and short-term specialists.

Kidman is Australia’s largest private land owner with about 1.3% of the country’s total land area and 2.5% of its agricultural land – virtually all of it leasehold. It has 19 properties operated as 12 enterprises, including 10 cattle stations, a bull breeding stud farm and a feedlot.

The properties are in SA, Western Australia, the Northern Territory and Queensland. They cover more than 101,000km² and carry a long-term average herd of 185,000.

The divestment of the two stations will reduce the area to 77,700km².

Greg Campbell, managing director of S. Kidman and Co, said: “We’re relieved to have got to a point of conclusion after a long and difficult sales process”. Welcoming Hancock leading the joint venture, he said: “Mrs Gina Rinehart is a prominent Australian and we appreciate her desires to further invest and grow the business”.



This article was originally published on The Conversation. Read the original article.
 
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CIC buys 10.5% of UK's National Grid's gas division
China Daily, December 9, 2016

British Prime Minister Theresa May's policy of reviewing investment coming from China into British infrastructure has witnessed a new development with the announcement that a consortium including China Investment Corporation agreed to acquire a 61 percent stake in National Grid Plc's gas division.

The consortium, including CIC, Macquarie Bank of Australia and Allianz Capital Partners, will pay 3.6 billion pounds ($4.55 billion) in cash for the stake.

CIC's stake will be 10.5 percent and the sale is expected to be completed by March next year.

May's government said it would review future infrastructure deals involving foreign buyers after she approved Chinese investment in an 18-billion-pounds French-designed nuclear power station at Hinkley Point in southwest England last year.

Thursday's deal is also subject to approval by the European Commission.

National Grid said it would continue discussions with the winning bidders about them taking a further 14 percent stake in the business.

"It is a well-trodden path in terms of infrastructure investment in the UK," said John Pettigrew, CEO of National Grid.

"There are a large number of these businesses which are owned by US, European or Asian investors. The key is that whoever is successful will have the same obligations as National Grid for security and safety," he added.

Martin Stanley, speaking on behalf of the winning consortium, known as MIRA, said: "MIRA has a long-standing operational experience in managing utilities and critical infrastructure in the UK, across Europe and around the world, and we are committed to being a long-term investor in and a responsible custodian of National Grid Gas Distribution."
 
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Chinese firm takes over printer giant Lexmark
(Xinhua) 18:21, December 13, 2016

BEIJING, Dec. 13 (Xinhua) -- Chinese tech firm Apex announced it has finished joint takeover of global laser printer giant Lexmark, the largest acquisition in the global printer industry.

Apex Technology Co. Ltd, a leading supplier of compatible printer consumables based in Zhuhai in south China's Guangdong Province, purchased a 100-percent stake in Lexmark for 3.9 billion U.S. dollars, together with PAG Asia Capital and Legend Capital of China.

"Lexmark is a renowned global laser printer manufacturer and has advanced technology in providing customized services for high-end users. Cooperation between Apex and Lexmark can enlarge our printer business and bring huge business opportunities," said Jackson Wang, chairman of Apex, at a press conference in Beijing on Monday.

After the acquisition, Lexmark's manufacturing and purchasing of raw materials will be partially transferred to China to optimize the industry chain and reduce production costs. More Lexmark products will enter the Chinese market.

David Reeder, president and CEO of Lexmark, said the new investors will provide sufficient capital support for the company's development and more benefits and opportunities for clients.

Lexmark will continue to strengthen its leading market status in European and U.S. markets and actively tap emerging markets, including China, according to Reeder.

"The takeover is the outcome of a strategic review. The laser printer industry has many technical thresholds and latercomers tend to have more patent barriers. Apex gets talent and technology through industry and capital integration, which is very important for Chinese firms in global market competition," said Yan Xiaolang, vice chairman of the China Semiconductor Industry Association.
 
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