KPMG is pleased to announce its role as advisors to the recently completed CNOOC acquisition of Canadian oil company Nexen, in a deal mooted as China's largest foreign M&A transaction to date.
Honson To, Head of Transactions and Restructuring for KPMG in China, says: “This prestigious engagement is evidence of our ability to deliver on complex, cross-functional and cross-border transactions. KPMG provided advice on financial and tax due diligence, tax structuring and pro forma disclosure requirements. Our team included members from Audit, Tax and Advisory across three continents.”
KPMG additionally expects to see a continued rise in China outbound deals in 2013, possibly with the US as the top target destination, followed by Canada, Australia and the EU. According to latest analysis by the firm’s Global China Practice (GCP), there were 40 M&A deals completed in 2012 which involved Chinese firms in the United States and were valued at USD11.1 billion. High tech was the most active sector in the US, with 10 deals recorded in 2012.
Honson To adds: “Additionally, with surging demand for energy in China, we expect China outbound investment in the energy and power sector in the US to continue to account for a significant share of the total investment.”
Peter Fung, Chairman of KPMG’s Global China Practice, says: “We congratulate CNOOC on their successful acquisition, one which demonstrates Chinese firms’ increasingly important role in the international M&A market. In addition to State Owned Enterprises (SOEs), we also expect to see increased M&A activity amongst private enterprises (POEs) in China. In fact, our latest data shows that 90 percent of China outbound investment to the US in 2012 was conducted by POEs. This was across sectors, of which high-tech was the most active.”
KPMG analysis for 2012 showed that overall 329 China outbound M&A deals were announced. The total value of 253 announced deals reached around USD66.5 billion, an increase of 244 percent compared to the previous year. In terms of China inbound trends, there were 548 announced M&A deals, amounting to just over USD40 billion. The data also indicates that 35 countries and regions invested in China in 2012, using M&A as a primary expansion method.
Fung concludes: “2012 was a bumper year for China's outbound M&A in terms of both value and volumes. Looking ahead for 2013, we expect increasing numbers of Chinese companies to seek global acquisitions.”
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