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THE MERRILL CORP. LOGO SHOULD GO HERE. and. welcome you to our webcast: Riding the Chinese M&A wave in the U.S. Introduction Moderator : Mary Kathleen Flynn Senior Editor/Video Producer The Deal LLC. - PowerPoint PPT Presentation
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and
welcome you to our webcast:
Riding the Chinese M&A wave in the U.S.
THE MERRILL CORP. LOGO SHOULD GO HERE
Introduction
Moderator:
Mary Kathleen Flynn Senior Editor/Video ProducerThe Deal LLC
REMINDER: Listeners will be in listen-only mode. We encourage you to e-mail questions via the Q&A panel box
to the right of your screen. Select questions will be answered during the last 10 minutes of the program.
We will be providing several poll questions throughout the discussion. These questions will also appear in a panel
box on the right of your screen.
If you are having technical difficulties, please call customer support at 866-229-3239.
Monish Bahl Senior Vice President,
Business Development and M&A
CDC Corp.
Lance GillilandManaging Director
Tudor, Pickering, Holt, & Co.
EXPERT PANEL
Gene RamirezManaging Director
Morgan Joseph TriArtisan Inc.
Charles ComeyPartner
Morrison & Foerster LLP
Todson Page Transaction Services Partner
PricewaterhouseCoopers
EXPERT PANEL
• China’s annual real GDP growth has averaged 9.9% from 1980 t0 2010, triple the worldwide rate of 3.3%
• The Chinese government has supported outbound M&A. The China Development Bank, for example, has loaned $30 billion to state-owned China National Petroleum Corp. for
more overseas M&A in energy resources
Source: Robert W. Baird Co.
What conditions are currently encouraging Chinese-based companies to pursue U.S. assets?
11
19
12 11
18
8
2006 2007 2008 2009 2010 Q1 11
VVolume trendsCChina into U.S. - No. of deals
$1,609
$10,390
$1,189
$4,411 $4,402
$2,804
2006 2007 2008 2009 2010 Q1 11
VValue trendsCChina into U.S. - $ in millions
Values are stabilizing, with technology and energy sectors leading the way
Financials11%
High Technology
33%
Consumer Products
6%
Energy and Power22%
Industrials6%
Materials17%
Healthcare6%
2010
Financials12%
High Technology
37%
Consumer Products
6%
Energy and Power38% Q1 ‘11
SSource: Thomson Reuters 4/15/2011
The coveted targeted sectors: Energy and tech
• Computers and electronics has been the leading outbound target sector over the past 10 years. Lenovo acquired IBM’s personal-computer business for $1.75 billion in ’04.
• U.S. companies have become the most frequent targets by Chinese firms. Firms headquartered in the U.S. have accounted for 18% of outbound targets since 2001.
Source: Robert W. Baird Co.
What do you believe is the biggest factor driving increased Chinese M&A activity in the
U.S.?
AUDIENCE SURVEY QUESTION:
A. Strength of the Chinese yuan vs. U.S. dollarB. Strengthening of global economyC. Increased demand in China for U.S. products and services
D. Political and financial instability in other global economies
E. Other
SELECT RECENT CHINESE ACQUISITIONS IN THE U.S.
Buyer Target Date Amount
AVIC Automobile Industry Holding Co. Ltd. China-based auto manufacturer
51% of Nexteer Automotive
U.S.- based automobile manufacturer
April 9, 2011 $229.5 million
Aviation Industry Corp.
Cirrus IndustriesU.S. aircraft maker
Feb. 28, 2011 $210 million
Tencent Holdings Ltd.
Riot Game Inc.Los Angeles-based online game developer
Feb. 4, 2011 $350 million
Cnooc International Ltd.
33.3% stake of Denver-Julesburg and Powder River Basins project
Jan. 30, 2011 $570 million
Source: Morgan Joseph TriArtisan LLC
SELECT RECENT CHINESE ACQUISITIONS IN THE U.S.
Buyer Target Date Amount
Industrial and Commercial Bank of China Ltd.
80% stake in Bank of East Asia National Association
Jan. 23, 2011 $140 million
LDK Solar Co. Ltd. 71.83% stake in Solar Power Inc.
California-based solar company
Jan. 6, 2010 $35 million
China Huaneng Group
InterGen NV
U.S.- based provider of power generation and fuel management services
Nov. 28, 2010 $1.23 billion
Source: Morgan Joseph TriArtisan LLC
Challenges for China-based acquirers in the U.S.
Deal structure trends of Chinese acquirers: Minority stakes and joint
ventures
What effect do you believe increased Chinese M&A activity will have on the pricing of U.S.
acquisition targets?A. Greatly increased prices
B. Somewhat increased prices
C. None
D. Somewhat decreased prices
E. Greatly decreased prices
AUDIENCE SURVEY QUESTION:
Attributes Chinese-based acquirers bring to table besides capital
The effects of turmoil in the Middle East and nuclear crisis in Japan on Chinese acquirers in the
U.S.
Closing remarks:Outlook for Chinese acquirers in
the U.S.
THE DEAL WEBCAST SERIESUpcoming Events
Brought to you by The Deal LLC and Bank of America Corp., this complimentary event on April 28 showcases the best ways to navigate new rules and trends in deal financing in the middle market and beyond. Reserve your seat:https://thedeal.webex.com/thedeal/onstage/g.php?t=a&d=666331375
•thank you for joining our webcast
and
THE MERRILL CORP. LOGO SHOULD GO HERE