Auhtor: Shaun Tan (shauntan@snpcorp.com)
The flurry in M&A activity in China highlights the increase in its shopping spree despite the offset of last year’s market conditions. With over US$31.1 billion spent on overseas M&A alone as of May 27th, China has already surpassed the total expenditure for the whole of 2007, according to Dealogic.
Several factors such as the stronger Yuan have benefited the Chinese economy despite the global crisis and have made foreign companies an attractive investment for Chinese companies. Stimulus and encouragement from local Chinese government through low interest loans and a variety of other beneficial policies have accounted for this boom in activity that is unlikely to slow. On top of these policies, the Chinese government controls a treasure trove of the largest foreign exchange reserve, totaling over US$1.76 trillion that can be used to further act as a stimulus to the economy.
As a result of the recent global crisis in the economy and capital markets, the valuations for foreign companies have declined whilst the Chinese firms are sitting on large cash balances built from recent years of steady and profitable growth. Chinese firms have also had the advantage of being in an environment of high domestic liquidity, a strengthening Yuan, political push for global expansion and the need for raw materials and new markets. These are just some of the key issues as to why Chinese firms have been able to pursue M&A activities and expansion.
With the mining and energy sectors at the forefront of Chinese M&A news, Chinese firms are continuously snapping up mining assets domestically and on an international level while the credit crisis hinders on their western rivals. This is evident in such transactions as in June where Shenzhen Zhongjin Lingnan Nonfemet triumphed with their bid over Indonesia’s Bumi Resources for Herald Resources and where potential bids for stake ownership in BHP Billiton, Baosteel Group eyeing Fortescue Metal Group and Chinalco’s $19.5 Billion deal to buy convertible bonds from Rio Tinto.
In other industries, Chinese state owned banks have been gearing for expansion to build global networks such as with ICBC setting a record for a stake purchase of South Africa’s Standard Bank.
With such rampant activity and growth within the M&A sector in China, the importance of Chinese language capabilities is a requirement for each transaction. Financial advisors today are becoming increasingly more tech savvy and have implemented to a certain extent their preference for a Virtual Data Room offering that increases the efficiencies of each process of the transaction. Until recently, Virtual Data Room platforms had predominantly been adapted to the English language, however with the rising demands of Chinese client’s multilingual support will become a mainstay for the VDR industry.
Here at Vite iRooms we have recognized the importance of multilingual support especially for Chinese language. During the indexing and building of a Virtual Data Room, street names, building names, material contracts and specific documents can be translated but their original meaning may not be conveyed. A loss in translation would result in impeding the progress of the transaction and creating a variety of hassles for parties involved. Our clients have since been able to maneuver around these issues and instead upload their original documents and index in Chinese. This would mean that the documents, folder names and index structure can all display Chinese.
After much planning and product development, this month SNP Vite is excited to launch an all Chinese Virtual Data Room platform. Vite iRooms has responded to the demands of the industry and have developed not only a platform that can display Chinese documents and index structures but more importantly allow for full Chinese language navigation. Vite iRooms is proud to not only have the infrastructure to support an all Chinese platform not only in traditional but also simplified Chinese, but also to provide multilingual customer service and project managers to facilitate each project. So now you can finally provide access and allow for all parties to utilize an all Chinese Virtual Data Room Platform.
