Chinanews, Beijing, Dec. 20 – During the first eleven months of this year, the number of merging cases among Chinese domestic companies has grown rapidly. Transaction volume of domestic merging cases was twice the amount of foreign merging cases, according to a report issued by PricewaterhouseCoopers on Tuesday.

 

From January to November, the total number of merging cases in China (excluding transaction deals at overseas markets) increased by 18% to reach well over 1,700. Transaction volume of these cases increased by 25% to exceed 80 billion US dollars. Of these, there were 987 domestic merging cases, increasing by 45%, and domestic transaction deals increased by 53% to reach 50.6 billion US dollars, said the report.

 

Since 2006, more merging cases has taken place among domestic companies, while previously, most merging cases were led by foreign companies.

 

Business trend, excessive liquidity and government support have led to the fast increase of domestic merging deals, said Xie Tao, a business partner of PricewaterhouseCoopers.

 

Since last year, more and more domestic companies have sought to merge with their counterparts in order to expand their business scale and to explore new markets. The well-developed Chinese economy has further boosted these merging activities. At the same time, there has occurred excessive liquidity in the market as prompted by the rising stock index, excessive equity fund and increasing bank loans. The government has also encouraged state-owned companies to take a leading role in merging activities, Xie said.

 

The report shows that by the end of November this year, the transaction volume of Chinese companies’ merging cases at overseas markets reached 16.4 billion US dollars, doubling last year’s number. Of these, the Industrial and Commercial Bank of China invested 5.4 billion US dollars in the Standard Bank of South Africa, the State Development Bank spent 3 billion US dollars to invest in Barclays Capital of Britain and China Investment Corporation spent 3 billion US dollars in the Blackstone Group.