The numerous Korean ‘M&A ‘high tech’ sphere in China… Concern on technology & talent leak
Ye Jin Soo | jinye@ | 2018-03-21 11:29:25
Chinese companies have been the largest buyers of domestic high-tech companies over the past five years followed by media, entertainment, finance, materials, and health care.
According to a report by the POSCO Management Research Institute on Red Capitalism hunting for global companies, China`s M & A activity has more than quadrupled from 24 in 2003-2007 to 100 in 2013-2017.
The number of transactions has increased, but the amount of transactions per transaction has greatly decreased from USD 142 million to USD 46 million. In the thomson Reuters M & A database, the POSCO Research Institute conducted a survey of 5,335 M & A cases involving Chinese companies (including Hong Kong and Macao), including acquisitions of non-Chinese companies.
According to the analysis, Chinese companies accounted for 22% of the merger of Korean hi-tech companies during 2013 ~ 2017 followed by media and entertainment (19%), finance (9%), materials (8%) and healthcare (6%).
According to the researcher, "Chinese companies have invested heavily in IT and Jiangsu enterprises by valuing Korea`s information technology (IT) level."
Shanda, a Chinese game maker, acquired the domestic game developer Actos Soft in 2004 and Identity Games in 2010. YG Entertainment has attracted USD 85 million from Chinese Internet Company Tencent and others, while Chinese consumers` interest in the Korean entertainment and broadcasting industry has increased due to the Korean Wave.
Eight of the M & A deals in the material industry accounted for half of the acquisition of chemical companies (four cases) in the past five years.
On the other hand, the total number of M & A deals for Chinese companies including Korean companies increased steeply from 778 in 2003 ~ 2007, to 1454 in 2008 ~ 2012 and to 1979 in 2013 ~ 2017. By region, the proportion of M & As in Asian companies has decreased from 59% in 2003 ~ 2007 to 37% in 2013 ~ 2017, while the proportion of European companies has increased from 15% to 33%. In particular, as China`s consumption is becoming more sophisticated, corporate mergers and acquisitions for healthcare, media, entertainment, and consumer goods industries have increased significantly in 2013-2017.
It is analyzed that the government of the second phase of the second phase, which has strengthened its power through the 19th party conventions, is going to engage in aggressive M & A in order to secure advanced technology, Chinese companies are focused on overseas exploitation, resources, premium brands and advanced technologies under government support.
A researcher from the research institute stated, "It is highly likely that China`s global M & A, which had been somewhat stagnant in 2017, will increase again." "China`s M & A in Korea has positive effects such as improving its financial structure and securing access to the Chinese market. However, there are side effects such as leakage of technology and talent and competitiveness of competitors."
By Ye Jin Soo jinye@
[ copyright ⓒ The Digitaltimes ]
According to a report by the POSCO Management Research Institute on Red Capitalism hunting for global companies, China`s M & A activity has more than quadrupled from 24 in 2003-2007 to 100 in 2013-2017.
The number of transactions has increased, but the amount of transactions per transaction has greatly decreased from USD 142 million to USD 46 million. In the thomson Reuters M & A database, the POSCO Research Institute conducted a survey of 5,335 M & A cases involving Chinese companies (including Hong Kong and Macao), including acquisitions of non-Chinese companies.
According to the analysis, Chinese companies accounted for 22% of the merger of Korean hi-tech companies during 2013 ~ 2017 followed by media and entertainment (19%), finance (9%), materials (8%) and healthcare (6%).
According to the researcher, "Chinese companies have invested heavily in IT and Jiangsu enterprises by valuing Korea`s information technology (IT) level."
Shanda, a Chinese game maker, acquired the domestic game developer Actos Soft in 2004 and Identity Games in 2010. YG Entertainment has attracted USD 85 million from Chinese Internet Company Tencent and others, while Chinese consumers` interest in the Korean entertainment and broadcasting industry has increased due to the Korean Wave.
Eight of the M & A deals in the material industry accounted for half of the acquisition of chemical companies (four cases) in the past five years.
On the other hand, the total number of M & A deals for Chinese companies including Korean companies increased steeply from 778 in 2003 ~ 2007, to 1454 in 2008 ~ 2012 and to 1979 in 2013 ~ 2017. By region, the proportion of M & As in Asian companies has decreased from 59% in 2003 ~ 2007 to 37% in 2013 ~ 2017, while the proportion of European companies has increased from 15% to 33%. In particular, as China`s consumption is becoming more sophisticated, corporate mergers and acquisitions for healthcare, media, entertainment, and consumer goods industries have increased significantly in 2013-2017.
It is analyzed that the government of the second phase of the second phase, which has strengthened its power through the 19th party conventions, is going to engage in aggressive M & A in order to secure advanced technology, Chinese companies are focused on overseas exploitation, resources, premium brands and advanced technologies under government support.
A researcher from the research institute stated, "It is highly likely that China`s global M & A, which had been somewhat stagnant in 2017, will increase again." "China`s M & A in Korea has positive effects such as improving its financial structure and securing access to the Chinese market. However, there are side effects such as leakage of technology and talent and competitiveness of competitors."
By Ye Jin Soo jinye@