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The investment intention of the Chinese M&A market fell again, and the transaction scale decreased.

Editor’s note: This article is from WeChat public account “Beyond J Curve” (ID: Beyondthejcurve), author CVSource hits the data.

“Extend your reading with data”, this issue surpasses the J curve to bring the China M&A market data report for August 2019. In August 2019, the investment intention of the Chinese M&A market fell again, and the transaction scale decreased. In August, private equity funds showed a decline in the M&A transactions of Chinese enterprises. The number of private equity withdrawals and the amount of returning funds fell by a large margin. See below for more details:

Directory

1. Chinese M&A Market Data Analysis

2. Geo-industry analysis of the M&A market

3. Big Cases of Chinese M&A Markets

4. Private Placement and Withdrawal of Private Equity Funds in August 2019

5. August policy and hotspots

Part 1: Chinese Enterprise M&A Market Data Analysis

In August 2019, the investment intention of the Chinese M&A market fell again, and the transaction scale decreased. In August, private equity funds showed a decline in the M&A transactions of Chinese enterprises. The number of private equity withdrawals and the amount of returning funds fell by a large margin.

▼M&A market announces monthly trading trends

In August 2019, the transaction activity of the Chinese M&A market declined slightly, and the transaction volume declined slightly. In August, 418 M&A transactions were disclosed, down 2.79% from the previous month and down 30.68% from the same period of last year. Among them, 339 were disclosed, and the total transaction amount was about 22.259 billion U.S. dollars, down 22.56% from the previous month and down 62.35%.

Figure 1-2018 August-2019 August China’s M&A market announces trading trends

▼M&A market completes monthly trading trends

A total of 192 M&A transactions were completed in August, a decrease of 30.18% from the previous month and a decrease of 22.27% from the same period of last year. Among them, there were 162 disclosures, and the total transaction amount was approximately US$14.007 billion, down 38.86% from the previous month. The decline was 49.37%, and the number of mergers and acquisitions and the scale of transactions in the M&A market of the Chinese enterprises fell.

Figure 2 – August 20-2018 August Chinese companies M&A market completes trading trends

Part 2:Geological Analysis of M&A Market Industry

1. In August 2019, the number of mergers and acquisitions in Guangdong Province was the largest, and the transaction scale in Jiangsu was the first in the country.

Figure 3-2019 completed the geographical distribution of mergers and acquisitions by investment target)

2 According to CVSource’s investment data, the number of manufacturing transactions was the highest in August 2019, a total of 50, accounting for 30.9%, followed by finance, medical health, real estate, chemical industry and IT. And informationization and so on. In terms of the size of the disclosure transaction, manufacturing accounted for the largest share in August, accounting for 38.03% of the US$5.327 billion, followed by the Internet of US$2.425 billion, accounting for 17.00%. Real estate, finance and medical health, the transaction amount was 19.27, 8.01, 438 million US dollars, respectively, the corresponding proportion was 13.77%, 5.72%, 3.12%.

Figure 4 – China’s M&A transactions completed by industry in August 2019

Figure 5 – In August 2019, the completion of M&A transactions by Chinese companies was distributed by industry size (US$100 million)

Part 3:Major Cases of Chinese M&A Markets

In August 2019, the company completed 2 mergers and acquisitions in excess of US$1 billion, and completed 13 mergers and acquisitions in excess of US$100 million. The largest transaction was the acquisition of Xingcheng by Daye Special Steel of US$3.385 billion. 86.50% equity of Special Steel.

▼Complete mergers and acquisitions in large numbers

In August 2019, Daye Special Steel Co., Ltd. (000708.SZ) successfully acquired Taifu Investment, Jiangyin Xintai, Jiangyin Yetai, Jiangyin Yangtai, Jiangyin by way of issuing shares.Qingtai and Jiangyin Xinfu held a total of 86.50% equity interest in Xingcheng Special Steel, with a transaction amount of US$3.385 billion. The new procurement, production and sales system formed after the integration will help Daye to give full play to the advantages of centralized procurement, improve the bargaining power of raw material procurement, further reduce production costs, and implement advanced management methods such as safety production standardization management to further improve the intrinsic safety level. And refined management level.

Table 1 – August 1019, China announced the case of mergers and acquisitions TOP10

▼ Cross-border M&A Cases

In August 2019, about 14 cross-border mergers and acquisitions were completed, including 8 outbound mergers and acquisitions and 6 inbound mergers; the disclosed transaction amount was approximately $3.502 billion.

In August, the largest cross-border M&A transaction was Jiangsu Shagang Group Co., Ltd. through its indirect wholly-owned subsidiary Tough Expert Limited, which invested US$2.209 billion to acquire a 24.01% stake in Global Switch, and through this further increase in GS, At present, Shagang Group has achieved full shareholding in GS. Secondly, Temasek invested 300 million US dollars to increase Li & Fung Logistics. After the capital increase, it accounted for 21.7%.

Table 2 – Partial Cases of Chinese Enterprises Participating in Cross-border Mergers and Acquisitions in August 2019

Part 4: Overview of Private Equity M&A and Exits in August 2019

In August, private equity funds weakened their support for Chinese M&A, down 49.12% from the previous month, and the transaction scale fell sharply.