Executives in the European Union and the United States see Chinese and other Asian companies, which are increasing overseas buying, as prime competitors for merger and acquisition opportunities, according to a survey released yesterday.
'China's banks, sovereign wealth fund, and energy companies are flexing their muscles overseas in an increasingly sophisticated way,' said Kroll managing director Chris Leahy. 'They have a very high level of comfort on complicated transactions, for example Chinalco's raid of Rio Tinto shares was a classic developed economy M&A move.'
Aluminum Corp of China, or Chinalco, approached Rio shareholders on February 1 and, through adviser Lehman Brothers, bought a 12 per cent stake by the end of the day. It was the largest share raid ever, according to bankers in London, and surpassed the US$5.4 billion acquisition of a 20 per cent stake in South Africa's Standard Bank Group in October by Industrial & Commercial Bank of China as the largest overseas acquisition by a mainland company.
It was widely seen as a step towards acquiring assets Rio may spin off should a merger with larger rival BHP Billiton, which kicked off in November, go forward.
Such moves have underscored how prominently Asian companies figure in the global acquisition race.
India's Tata Steel paid GBP6.2 billion (HK$95.14 billion) for Anglo-Dutch steelmaker Corus last year. Tata also paid GBP1.15 billion to Ford Motor last month for its Jaguar and Land Rover car operations.
The M&A survey was sponsored by market risk consultancy Kroll, insurance broker Marsh, and Mercer, a human resources consultancy. The Economist Intelligence Unit surveyed 670 executives in January.
