The Master Thesis "An Analysis of the M&A Market in Mainland China "gives an introduction into the Mergers & Acquisitions (M&A) business and analyses the M&A market in the Mainland of the People’s Republic of China (China). Thereby the Thesis focuses on the development of cross-border transactions within recent years and the relevant intra and extra Chinese influence factors.
After the publication of recent M&A transactions data in October 2004 it is clear that the M&A market in China gains importance in a rapid manner. Within the first nine month of 2004 the Chinese market triplicated from about 10 USDbn in the previous year’s period to 35 USDbn. With a total of 695 an-nounced domestic and cross-border transactions – in comparison to 730 trans-action with a value of 52 USDbn in Germany (cp. w/o author, 2004b and w/o author, 2004a) – China comes close to the sixth position of Germany in world-wide M&A volume.
This rapid growth supports the common acceptation in the Investment Banking environment that China will be one of the most attractive markets for Corporate Finance services in the following years. Therefore the Master-Thesis should give an insight into the historic development of M&A transactions with Chinese involvement and the current market situation. Thereby the paper will focus on country specific influence factors that have significant importance to M&A transactions.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Research Problem
- Methodology
- Definition of M&A
- Rationale for M&A in Mainland China
- Value Generation of Cross-Border Transactions
- Pros and Cons for M&A in China
- Pros
- Cons
- Summary
- FDI
- Inbound FDI to China
- The Importance of M&A Transactions
- Summary
- The Chinese M&A market
- Numbers from Literature Review
- An Analysis of the Chinese M&A Market from 2000 until 2004
- The Overall Market
- Sector Segmentation
- Geographic Segmentation
- The Future of M&A in China
- Summary
- Available Investment Entities for Foreign Investors
- Foreign Investment Enterprises
- Joint Ventures
- Wholly Foreign Owned Enterprises
- Foreign Investment Companies - Limited by Shares
- Shares of Chinese Listed Joint-Stock Companies
- Summary
- Transaction Forms
- Transaction Classes
- Asset Deals
- Share Deals
- Mergers
- Summary
- Transaction Structures
- Direct Acquisitions - Onshore
- Direct Acquisitions - Offshore
- Indirect Acquisitions – Onshore
- Indirect Acquisitions - Offshore
- Summary
- Legal Environment
- Key Government Agencies
- Recent Legislation
- Land Use Rights
- Summary
- Peculiarities of the M&A Transactions in China
- Cross-Border Issues
- Government Approvals
- Sector Regulation
- Antitrust Review
- Valuation Procedure
- Summary
- Due Diligence
- Financial
- Legal
- Tax
- Summary
- Documentation
- Letter of Intent
- Covenants
- Representations and Warranties
- Other Issues
- Taxation
- Management Incentives
- Financing
- Consideration
- Exit Options
- Summary
- Case Study
- Legal Environment for M&A Transactions Involving Banks
- The Acquirer and the Target Firm
- The Acquiror
- The Target
- The Transaction
- Rationale and Analysis
- Evaluation of Findings
- Conclusion
- The rationale for M&A in Mainland China
- The value generation potential of cross-border M&A transactions in China
- The legal and regulatory framework governing M&A in China
- The investment entities available for foreign investors in China
- The different transaction forms and structures in China
- Introduction: This chapter introduces the research problem, methodology, definition of M&A, and the rationale for M&A in Mainland China. It outlines the value generation of cross-border transactions and analyzes the pros and cons of M&A in the Chinese context.
- FDI: This chapter examines the role of Foreign Direct Investment (FDI) in China, highlighting the importance of M&A transactions for inbound FDI. It summarizes the key trends and developments in FDI inflows to China.
- The Chinese M&A market: This chapter provides an overview of the Chinese M&A market, based on data from literature review and analysis of market trends from 2000 to 2004. It explores the overall market dynamics, sector and geographic segmentation, and forecasts for the future of M&A in China.
- Available Investment Entities for Foreign Investors: This chapter examines the various investment entities available for foreign investors in China, including joint ventures, wholly foreign owned enterprises, and foreign investment companies. It discusses the specific features and legal aspects of each entity.
- Transaction Forms: This chapter delves into the different transaction forms used in M&A in China, including asset deals, share deals, and mergers. It analyzes the various transaction structures, such as direct and indirect acquisitions, both onshore and offshore.
- Legal Environment: This chapter provides an overview of the legal environment for M&A in China, highlighting the key government agencies, recent legislation, and land use rights. It discusses the importance of understanding the legal framework for successful M&A transactions.
- Peculiarities of the M&A Transactions in China: This chapter examines the specific challenges and peculiarities faced by foreign investors engaging in M&A transactions in China. It focuses on cross-border issues, government approvals, due diligence, documentation, and other considerations.
- Case Study: This chapter presents a case study of an M&A transaction involving a bank in China. It explores the legal environment for M&A in the banking sector, the acquirer and target firm, the transaction details, and the rationale and analysis behind the deal.
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This Master Thesis aims to analyze the M&A market in Mainland China, with a specific focus on cross-border transactions. The study explores the rationale for M&A in China, including the value generation potential of cross-border deals. It investigates the legal environment and the specific challenges faced by foreign investors in this market. The thesis also examines the various investment entities available for foreign investors and the different transaction forms and structures prevalent in China.
Zusammenfassung der Kapitel (Chapter Summaries)
Schlüsselwörter (Keywords)
This Master Thesis focuses on the M&A market in Mainland China, encompassing themes of cross-border transactions, value generation, legal environment, FDI, investment entities, transaction forms, and specific challenges faced by foreign investors. The research examines the rationale for M&A in China and analyzes the recent trends and future prospects of this market.
- Quote paper
- Tim Brückner (Author), 2005, An Analysis of the M&A Market in Mainland China, Munich, GRIN Verlag, https://www.grin.com/document/39089
