中国企业走向全球并购&A Game

Wanhua Industrial Group is a product, and a part, of China’s incredible growth story. Over the past three decades, the company, based in the coastal city of Yantai, some 800 kilometers (500 miles) north of Shanghai, has transformed itself from a small regional manufacturer into Asia’s biggest maker of polyurethane, a plastic used in everything from automobiles to carpets. Looking to sustain that growth, CEO Ding Jiansheng has set his sights on Europe, which represents about one third of the global market for isocyanates, the raw materials for making polyurethane.

2009年末，丁在BorsodChem找到了一个目标，BorsodChem是一家匈牙利化学泡沫和塑料制造商，拥有强大的欧洲分销网络。BorsodChem在一次€英国私人股本公司PymiRA咨询公司和维也纳资本合伙公司2006年度杠杆收购16亿（21亿美元）。当全球金融危机来袭时，公司的销售额急剧下降，亏损不断增加，公司面临着破产的风险€14.7亿债务。BorsodChem拒绝了丁磊和万华实业的第一个提议，而是希望与60多家银行进行债务再融资，因此中国人制定了另一种策略。万华实业迅速买断€2亿的公司债务才能在重组桌上获得一席之地。这是中国公司首次使用这种策略，这是对冲基金和私人股本投资者寻求获得公司控制权的主要手段。

“This was a secret strategy,” says Joseph Tse, a Beijing-based partner at Allen & Overy, the law firm that advised the Chinese company. “It was not without its risks or challenges.” Wanhua Industrial, a state-owned enterprise, needed to win approval from government regulators to pursue its gambit; the strategy also could have left it holding loans in a failing business. But in a three-day session in Frankfurt and Budapest, the company opened negotiations that eventually allowed it to convert its debt into a 38 percent stake in BorsodChem; it also provided €140 million in financing in exchange for the right to buy full control. By February 2011 the company had completed a €1.24 billion takeover, becoming one of the world’s three biggest producers of isocyanates, alongside Germany’s BASF and Bayer. Ding, who took over as chairman of BorsodChem in January, said the merger would turn the two outfits “from two regional players into one global company.” He called the deal a “beacon” for other Chinese companies looking to invest in Europe.

中国是世界上最大的出口经济,要g global. After years of sporadic and often unsuccessful forays into the takeover business, Chinese companies are emerging as big buyers of offshore concerns. Oil and gas companies and metals and mining conglomerates continue to be the biggest actors, seeking to secure natural resources to feed the country’s industrial machine. Increasingly, however, Chinese manufacturing, transport and even financial companies are looking for overseas deals to acquire technology, world-class brands and global distribution. And in their pursuit of such assets, Chinese companies are approaching the M&A game with a sophistication unimaginable only a few years ago.

中国的全球银行家 Foreign banks handled most of the overseas M&A deals by Chinese companies in 2011.
RANK	BANK	交易价值 ($ MILLIONS)	NO. OF DEALS
1	Bank of America Merrill Lynch	$27,017	23
2	瑞银	18,734	21
3	花旗	18,405	16
4	高盛集团	16721年	20
5	摩根大通	15,371	17
6	中国International Capital Corp.	13,372	24
7	Credit Suisse	12,501	21
8	Morgan Stanley	10,299	9
9	Deutsche Bank	8,517	16
10	Caixa Geral de Dep公司ó西托斯	8,326	2
Source: Dealogic.

Chinese enterprises spent $61.2 billion in 2011 to buy offshore companies and assets, up 20 percent from a year earlier and a threefold increase from 2006, according to data provider Dealogic. The number of Chinese overseas acquisitions jumped 24 percent from 2010, to 403. The country ranks fifth by deal volume, behind the U.S., the U.K., Japan and France, according to Allen & Overy.

“This is the start of a greater and longer-term trend,” says Yan Lan, head of Greater China investment banking at Lazard’s Beijing office. “China has a need to grow abroad, its companies have the money, and its ability to conduct transactions has been accelerated by the global financial crisis.”

纵观过去6个月中国的海外收购，就可以看出中国雄心壮志的广度。今年1月，湖南工程机械巨头三一重工（Sany Heavy Industry Co.）与中信私募股权基金管理公司（Citic Private Equity Funds Management Co.）联手收购德国混凝土泵制造商普茨迈斯特控股（Putzmeister Holding），进行收购€3.6亿。也是那个月山东重工集团有限公司度过的€1.78亿欧元收购意大利豪华游艇制造商费雷蒂集团75%的股份。2011年10月，中国化工集团公司以14.4亿美元收购了以色列农药生产商Makhteshim Agan Industries 60%的股权。

The upsurge in China’s global acquisition activity is only just beginning. The country’s stock of foreign direct investment reached $298 billion in 2010, representing just 1.5 percent of global FDI stock, about the same as Sweden’s, according to the United Nations Conference on Trade and Development. By contrast, China accounted for 9.2 percent of world trade that year and 9.3 percent of global gross domestic product, according to Unctad and World Bank statistics.

The country’s direct overseas investment is set to surpass FDI coming into China before 2015, according to the Ministry of Commerce. That would represent a dramatic change for a country that has been the biggest magnet of foreign direct investment for most of the past two decades. China has attracted more than $1 trillion in FDI since 1978, when then-leader Deng Xiaoping broke with decades of communism and launched market-oriented reforms; the vast bulk of those funds has flowed into the country in the past 20 years. Now that tidal wave of money is set to reverse course, according to Rhodium Group, a New York–based economic and political consulting firm. China could directly invest between $1 trillion and $2 trillion offshore by 2020, the firm estimates.

中国寻找自然资源——尤其是oil and gas — dominates the country’s offshore acquisition activity, and it’s not hard to see why. In 2010, China became the world’s biggest energy consumer, accounting for 20.3 percent of global use, surpassing the U.S.’s 19 percent, according to the “Statistical Review of World Energy,” published by British oil giant BP. A fast-growing middle class has turned China into the world’s largest automobile market, adding to demand from an energy-hungry industrial sector. The country now buys roughly half of its oil — more than 5.5 million barrels a day — on world markets. “China is very interested in establishing a supply of energy for growth. That means both resources and technology,” says William Owens, Hong Kong–based Asia chairman of private equity firm AEA Investors and a vice chairman of the U.S. Joint Chiefs of Staff in the 1990s. “China has a great interest in energy storage technology, clean coal technologies, shale gas and deep-ocean drilling.”

In last year’s biggest announced deal, China Petrochemical Corp., or Sinopec, paid $4.8 billion to acquire a 30 percent stake in Petrogal Brasil, the Brazilian subsidiary of Portuguese oil and gas company Galp Energia. It was the latest in a string of deals by the petrochemicals giant to secure access to crude supplies. In 2010, Sinopec bought 40 percent of the Brazilian unit of Spain’s Repsol YPF for $7.1 billion. One year before that Sinopec completed an $8.99 billion acquisition of Geneva-based oil exploration company Addax Petroleum Corp.

Chinese companies have spent $136.9 billion on overseas companies in the oil and gas and metals and mining sectors over the past six years — more than half of all foreign M&A activity during the period, according to Dealogic. Seven of the ten largest deals were in these sectors, led by the joint $14.3 billion purchase of a 12 percent stake in Anglo-Australian mining company Rio Tinto by Aluminum Corp. of China and Alcoa in 2008. Chinalco bought out Alcoa’s share the following year.

Resource deals are an obvious first step for China’s budding takeover artists. They meet a pressing economic need, and they pose fewer managerial obstacles than the average corporate acquisition.

“Generally, you’re buying assets, and assets are a lot easier to buy than a business,” explains Gordon Paterson, head of Deutsche Bank’s M&A business for Asia-Pacific. “With resources, you’re digging a hole in the ground, sticking in a pipe, getting it to port and shipping it out.”

The new surge of Chinese M&A activity is extending far beyond resource plays, though. Both state and private entities are looking overseas to acquire technology and powerful brands, and to extend their own supply and distribution networks. As Michael Weiss, head of China M&A at Morgan Stanley in Hong Kong, puts it, “The trend is slowly moving from what China needs to what China wants.”

推动这种转变是去北京的愿望up-market. A key plank of the government’s long-term development plan is to shift enterprises from the low-end, labor-intensive manufacturing that has driven China’s economic success over the past three decades into higher-margin activities. Pulling off that trick is critical to sustaining growth in coming years and avoiding the so-called middle-income trap whereby many economies stall when per capita incomes hit about $15,000 a year. The strong growth of wages in recent years and the rise of the renminbi, which combine to render Chinese goods more expensive overseas, makes the transition all the more important. The renminbi has gained 40 percent against the U.S. dollar in real terms since 2005, according to a December report by the U.S. Treasury Department, while China’s current five-year plan calls for the minimum wage to go up by 13 percent a year through 2015.

“中国公司正在从根本上调整他们的商业模式，”铑研究主管ThiloHanemann说国内制造业的规模经济已经达到最大化，因此它们必须在生产链的上游和下游占据更大的份额。”

That ambition explains Chinese companies’ appetite for technology. In 2010, Zhejiang Geely Holding Group Co., parent of China’s seventh-largest automaker, bought Volvo Car Corp. from Ford Motor Co. for $1.8 billion. Geely hopes Volvo’s technology will help it compete more effectively against the Chinese subsidiaries of foreign automakers such as General Motors Co. and Volkswagen. Chinese brands saw their share of the domestic market fall by nearly 2 percentage points in 2011, to 29.1 percent, according to the China Association of Automobile Manufacturers.

Just as China is gaining a bigger appetite for foreign acquisitions, Europe’s economic crisis is providing plenty of opportunities for cash-rich buyers. It’s no surprise, then, that Chinese companies have turned to Western Europe for some of their most significant recent purchases. The country’s direct investment in Europe rose to about $9 billion last year from $3 billion in 2010 and an average of about $1 billion a year before 2008, estimates Hanemann.

“There are manufacturing industries in Europe facing stalled growth and eroded competitiveness,” says Yang Chang-po, a managing director at Goldman Sachs Gao Hua Securities Co. in Beijing. “Many manufacturers are looking to sell themselves, and China in particular gives a higher premium for their assets, their technology and their production know-how.”

Many of these deals are aimed as much at bolstering the domestic businesses of Chinese companies as conquering foreign markets. Shandong Heavy hopes its acquisition of Ferretti will facilitate the Italian company’s yacht sales in China, where the number of millionaire households reached 1.11 million in 2010, according to Boston Consulting Group. In April 2011, China National Bluestar (Group) Co., a joint venture between state-owned China National Chemical Corp. and the U.S.’s Blackstone Group, paid $2.17 billion for Norwegian silicon materials producer Elkem. The deal gives Bluestar access to raw materials and technology to upgrade its Chinese plants.

Chinese companies have been quick to take advantage of the distress of some of Europe’s most debt-ridden states. In December, China Three Gorges Corp., operator of the world’s largest hydropower project, outbid E.ON, Germany’s largest electric utility, and Centrais Elétricas Brasileiras, Brazil’s state-owned power company, to acquire a 21.35 percent stake in Energias de Portugal from the Portuguese government for €2.7 billion. As part of the deal, Three Gorges will also help arrange a €2 billion long-term revolving credit facility for EDP and invest another €2 billion by 2015 for minority stakes in Portuguese power projects. Portugal’s government was required to sell the stake as part of a €78 billion bailout agreement with the European Union, the European Central Bank and the International Monetary Fund. That agreement also obliges the government to privatize other assets. In February, State Grid Corp. of China bought a 25 percent stake in Portuguese electric utility Redes Energéticas Nacionais for €387 million.

In 2009, Cosco Pacific, the Hong Kong–listed subsidiary of China’s state-owned shipping and logistics conglomerate China Ocean Shipping (Group) Co., paid $4.2 billion to secure a 35-year concession to operate two of the three container berths in Piraeus, Greece’s biggest container port.

CHINESE COMPANIES STARTED investing overseas as far back as the 1980s as state investment enterprises started buying real estate and industrial assets, including stakes in Hong Kong’s flag carrier, Cathay Pacific Airways, and Hong Kong Telecommunications. Activity stepped up following the country’s entry into the World Trade Organization in 2001, an event that signaled China’s arrival on the global economic stage and lowered barriers to trade and investment. Taking advantage of China’s new trade status, then-Premier Zhu Rongji launched a “go global” policy in the country’s tenth five-year plan that encouraged Chinese enterprises to expand overseas. In effect, the government adopted the South Korean model of encouraging the country’s biggest and most strategic industrial companies to become multinational conglomerates capable of developing global brands and competing around the world.

150多名gro大型国有企业ups under Beijing’s direct control account for about 70 percent of China’s foreign direct investment, and the country’s 20 biggest overseas investors are all state-controlled conglomerates, led by China National Offshore Oil Corp. (Cnooc), China National Petroleum Corp. and China Petroleum Corp., according to Ministry of Commerce statistics.

In December 2004, China made a breakthrough when Beijing-based Lenovo Group agreed to buy IBM Corp.’s personal computer business for $1.75 billion, thereby gaining control of the iconic brand that launched the PC industry. The deal signaled the desire of Chinese companies to join the top ranks of the world’s multinational elite rather than simply working as low-cost, low-margin manufacturers.

Yet Chinese efforts met with as much failure as success in the first half of the previous decade. In 2000, D’Long Group, a privately owned auto-parts and food conglomerate, bought U.S. lawn mower and garden equipment maker Murray for $400 million, seeking to combine Murray’s design and distribution capabilities with China’s low-cost manufacturing. Instead, quality problems with Chinese components led to product recalls and declining sales, and just four years later Murray filed for bankruptcy protection. U.S. engine maker Briggs & Stratton Corp. bought most of Murray’s assets in 2005.

Other notable setbacks included Shanghai Automotive Industry Corp. (Group)’s 2004 acquisition of a 49 percent stake in Ssangyong Motor Co., then South Korea’s fourth-biggest automaker. Ssangyong had been making headway in export markets — particularly, in selling sport utility vehicles in the U.S. — but rising gasoline prices and the global financial crisis hit it hard. The company filed for receivership in January 2009, forcing SAIC to write off practically all of its $618 million investment.

中国最重大的失败发生在2005年，当时中海油以185亿美元竞购美国石油公司优尼科（Unocal），在美国国会引发大规模政治反对。一个月后，中海油撤回了收购要约，允许雪佛龙公司收购优尼科。

Those early failures resonated in China’s state-led economy. Top corporate executives hold political responsibilities that include leading Communist Party committees within their respective companies. These executives routinely move among roles in industry, regulatory agencies and the government. They have to consider the political implications of a deal going badly, not just whether a purchase will be accretive or dilutive to shareholders. The result is an inbuilt caution toward takeovers. “Chinese companies tend to spend more time building consensus with regulators,” says Goldman Sachs Gao Hua’s Yang. Cheng Li, a research director at the Brookings Institution, a Washington think tank, echoes the point. “There is no doubt that Chinese business leaders want to go overseas, but they worry about whether foreign policy objectives may conflict with the go-global efforts,” he says.

Recent appointments underscore the nexus between industry and the state. In October, Guo Shuqing, chairman of China Construction Bank Corp., and Xiang Junbo, chairman of Agricultural Bank of China, resigned to head the China Securities Regulatory Commission and the China Insurance Regulatory Commission, respectively. They were replaced by Wang Hongzhang, a deputy governor at China’s central bank, and Jiang Chaoliang, chairman of Bank of Communications and former president of China Development Bank Corp.

Would-be acquirers also have to run a gauntlet of bureaucratic obstacles. Although the authorities clarified procedures in 2009 and provided for greater sources of funding, getting approvals is still a challenge for Chinese companies, especially in a bidding process, says Lazard’s Yan. Companies must obtain approval from the Ministry of Commerce for any offshore investment exceeding $100 million; deals worth more than $10 million require a nod from provincial authorities. Offshore investments also require approvals from the National Development and Reform Commission; the State-Owned Assets Supervision and Administration Commission, which wields the government’s authority as shareholder; and the State Administration of Foreign Exchange, the central bank arm that manages China’s currency reserves.

These hurdles cause uncertainty and delays that can impede deals. In January, China Development Bank lost its bid to acquire the aircraft-leasing business of Royal Bank of Scotland Group to a consortium led by Sumitomo Mitsui Financial Group. Although CDB reportedly bid more than the Japanese group’s $7.3 billion offer, concerns about the Chinese approval process undermined its efforts.

Yet in spite of the obstacles, more and more Chinese companies see foreign takeovers as essential to their future growth.

One of China’s leading serial acquirers is HNA Group Co., owner of Hainan Airlines; the company has used M&A to create an aviation, logistics and tourism conglomerate. In December the group acquired GE SeaCo, a maritime-container-leasing unit of General Electric Capital Corp., for $2.5 billion. HNA did the deal with Bravia Capital, a Hong Kong–based private equity company that has coinvested with HNA on six deals in the past five years. “We are looking at bolt-on strategies, allowing us to leverage our Chinese arm with non-Chinese businesses and raise revenue at a much faster rate than costs,” says Bravia CEO Bharat Bhise, who has worked closely with HNA since 1995, when he helped arrange an investment in the airline by a vehicle controlled by George Soros. HNA has already secured $500 million in new business for SeaCo operations, 60 percent of it from Chinese companies.

In October 2011, HNA teamed with Bravia to buy ACT Airlines, an Istanbul-based cargo carrier they rebranded as MyCargo Airlines. A year earlier the two companies had purchased MyTechnic, a major, Istanbul-based aircraft maintenance and repair concern. Terms of the deals weren’t disclosed. With its airline and servicing operations, HNA is in a prime position to profit from the fast-growing trade between China and the Middle East and Eastern Europe. Acquisitions have expanded HNA’s footprint and helped sales grow by 35 percent last year, to more than 100 billion yuan ($15.9 billion). “We have a breakneck strategy, and we’re growing very fast,” says Bhise.

其他中国企业也在利用收购来收购消费品牌，其主要目标往往是加强在国内的竞争力。复星国际（fosuninternational）是一家总部位于上海的医药、钢铁和房地产企业集团，收购了法国度假村运营商clubm 7.1%的股份é迪特兰é在2010年。去年，地中海俱乐部在中国东北部哈尔滨附近的亚布力开设了一个滑雪场。该公司计划今年晚些时候在南部旅游城市桂林开设第二家度假村。”复星董事长郭广昌在一封电子邮件中回答记者的问题时说：“我们只投资那些重视参与中国战略的公司。”。

2010年，中国最大的酒店集团上海锦江国际酒店（集团）有限公司（Shanghai Jin Jiang International Hotels（Group）Co.）与总部位于马里兰州安纳波利斯（Annapolis）的私募股权投资公司Thayer Lodding Group联手，收购了美国最大的独立酒店管理公司Interstate Hotels&Resorts，后者经营232处房产。Interstate是唯一一家在中国国有企业支持下被私有化的美国上市公司。该公司董事长俞敏良当时表示，这笔交易不仅为锦江提供了一个在国际上推广品牌的平台，还使该公司得以借鉴西方管理实践，在国内加强集团实力。

Management skills are a key concern for many acquirers. Some Chinese executives struggle to bridge the culture gap and comply with legal and regulatory standards in overseas markets. Chinese Vice Premier Wang Qishan underscored the challenges three years ago when he cautioned Xiang Wenbo, president of Sany Heavy Industry, about hunting for overseas companies. Sany, often referred to as China’s Caterpillar, employs more than 70,000 workers and earned 8.65 billion yuan on sales of 50.5 billion yuan in 2011.

“Do you have a handle on your own management capabilities?” Wang was quoted as asking Xiang at a meeting with the Hunan delegation to the National People’s Congress, China’s Parliament. “Have you analyzed the cultural differences of the two sides? Do you understand the relationship between unionized labor and management in that place? If the other side’s engineers resign, are you going to send people from Changsha and make the whole company speak Hunanese?”

At Putzmeister, its latest acquisition, Sany has decided to leave the company’s German management, led by CEO Norbert Scheuch, in place. “Putzmeister will remain as an independent brand with its own management within the Sany group,” said Liang Wengen, Sany founder and chairman, in announcing the merger. Similarly, China National Agrochemical Corp. said in October that it planned to keep the existing management at Makhteshim Agan and maintain the company’s Tel Aviv headquarters.

中国National Bluestar, which needed 18 months to complete its buyout of Elkem, raised management issues at the start of its negotiations to ensure that Elkem’s senior executives would remain in place after the acquisition, according to Kit Chan, one of the RBS bankers who advised Bluestar on the deal. “Bluestar planned how the future management team would look and how they would manage the business moving forward,” says Chan.

在匈牙利的Kazincbarcika，万华工业在过去的一年里把BorsodChem变成了欧洲的滩头阵地。丁总将匈牙利公司的销售队伍整合到万华实业的全球网络中，并进行了投资€在一家新工厂投资2亿美元生产甲苯二异氰酸酯，这是一种生产软垫和汽车座椅用软质聚氨酯泡沫的原料。接下来，丁磊计划在BorsodChem引进万华的节能技术。尽管欧洲经济陷入困境，但这位高管相信，他扩大后的公司将从欧洲各地的重建和保温项目中获利。”我们的战略定位是在中东欧，我们认为整个欧洲都会恢复增长，因此我们持乐观态度，”丁磊最近表示。

With such confidence brimming in corporate China, the country’s foreign takeover spree may be just beginning. • •