Goldman Takes Lead on M&A in China
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Goldman Sachs Group tops the ranking this year among banks working on takeovers in Asia outside Japan, after advising on the biggest transactions in China during the period.
Goldman Sachs has advised on $23 billion of mergers and acquisitions in Asia announced in 2005, according to data compiled by Bloomberg. Half the New York-based bank’s business came from deals in China.
China accounted for 30% of announced transactions in Asia excluding Japan this year, as the revamp of state owned banks and a shortage of energy supplies drove stake sales and takeovers.
To stay on top next year, Goldman may need to keep winning deals from Chinese clients looking to grow overseas or seeking overseas investors to aid domestic expansion.
“M &A activity is increasing, both into and out of China, and is increasingly commercially-driven as opposed to policy-driven,” the Hong Kong-based Asian head of mergers and acquisitions at Goldman, Johan Leven, said. “Tough as it may be, deals are getting done. China will continue to increase its importance, both in absolute terms and in relative terms in the region.”
Goldman is advising a group of investors on buying a $3 billion stake in Industrial and Commercial Bank of China, the nation’s biggest lender, people familiar with the transaction said in August. The bank was also involved in $8.4 billion of acquisitions by China Netcom Group and China National Petroleum, and a $1 billion stake sale by Ping An Insurance.
“Many Chinese corporates have been very skilled in securing high-quality partners to help them restructure their companies and build stronger strategic positions,” Mr. Levin said in an interview.
“M&A is back to the trend line after a big downturn following the burst of the Internet bubble and the rapid recovery in the last two-and-a-half years.”
M&A transactions announced in Asia excluding Japan this year hit a record of $170 billion, data complied by Bloomberg shows. Mergers reached $162 billion in 2000 and slumped by two-fifths between then and 2003 after the Internet bubble burst.
