YICAI｜Shanghai Aims for USD41.4 Billion of M&As Over Next Three Years
(Yicai) Dec. 11 -- Shanghai is targeting CNY300 billion (USD41.4 billion) of mergers and acquisitions over the coming three years after China's securities regulator unveiled measures to promote M&A activity as part of the central government's economic stimulus package.
Shanghai aims to complete a series of high-profile M&As and cultivate about 10 internationally competitive listed companies in key sectors such as integrated circuits, biomedicine, and new materials, according to an action plan the city government released yesterday.
Through these actions, Shanghai will activate more than CNY2 trillion (USD275.9 billion) of assets, while attracting three to five M&A fund managers influential in the industry and greatly enhance the M&A service capabilities of local intermediaries, per the plan.
The China Securities Regulatory Commission announced in September that it will actively support M&A deals in strategic emerging industries and future industries to channel more resources toward new quality productive forces. The measures the CSRC rolled out aim to make it easier for firms to pursue M&As, reduce regulatory hurdles, and promote faster decision-making.
Some 444 companies listed in the Chinese mainland were based in Shanghai as of yesterday's market close, with a total market capitalization of CNY9.4 trillion (USD1.3 trillion). Biotech companies predominate with 52, followed by electronics businesses at 51 and information technology firms at 40, according to Wind Information.
The combination of Guotai Junan Securities and Haitong Securities was Shanghai's most high-profile M&A this year. Shanghai's state-owned assets manager signed off on Guotai Junan's absorption of Haitong on Nov. 19 after the pair proposed the union in early September.
Guotai Junan, the larger of the two brokerage giants, will issue A-shares and H-shares, those traded in the Chinese mainland and Hong Kong, to Haitong's shareholders at a ratio of 0.62 to 1. Haitong will be delisted.
The deal is seen as a major step in the consolidation of China's securities industry and is expected to set a precedent for large-scale M&As.